Question

# 5. A loan of $4000 at 7.5% compounded monthly requires three payments of $1000 at 6, 12, and 18 months after the

date of the loan, and a final payment of the full balance after two years. What is the amount of the final payment?(1410.77)

6. What single payment one year from now would be equivalent to payments of $2500 due in three months, and another $2500 due in 2 years? Assume money can earn 7% pacq (compounded quarterly).

7. To motivate individuals to start saving at an early age, financial planners will sometimes present the resus of the following type of calculation. How much must a 25-year-old individual invest five years from now to have the same maturity value at age 55 as an immediate investment of $1000? Assume that both investments earn 8% compounded annually. ($1469.33)

Math