Any Takers 2

Draft a response to each of the bulleted questions below. Each question must have its own response.

1. Compute the future value in year 9 of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 using a 10 percent interest rate.
2. Compute the future value in year 7 of a $2,000 deposit in year 1 and another $2,500 deposit at the end of year 4 using an 8 percent interest rate.
3. Compute the present value of a $2,000 deposit in year 1 and another $1,500 deposit at the end of year 3 if interest rates are 10 percent.
4. What’s the present value of a $900 annuity payment over five years if interest rates are 8 percent?
5.  If the present value of an ordinary, 6-year annuity is $8,500 and interest rates are 9.5 percent, what’s the present value of the same annuity due?
6. A loan is offered with monthly payments and a 10 percent APR. What’s the loan’s effective annual rate (EAR)?
7. You wish to buy a $25,000 car. The dealer offers you a 4-year loan with a 9 percent APR. What are the monthly payments? How would the payment differ if you paid interest only? What would the consequences of such a decision be?(Calculate monthly payment only)