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  3. 1 find the periodic payment r required to amortize a...

Question: 1 find the periodic payment r required to amortize a...

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1. Find the periodic payment R required to amortize a loan of P dollars over t years with interest charged at the rate of r%/year compounded m times a year. (Round your answer to the nearest cent.)

P = 40,000, r = 2, t = 19, m = 2

2.Paula is considering the purchase of a new car. She has narrowed her search to two cars that are equally appealing to her. Car A costs $25,000, and Car B costs $25,200. The manufacturer of Car A is offering 0% financing for 48 months with zero down, while the manufacturer of Car B is offering a rebate of $2000 at the time of purchase plus financing at the rate of 3%/year compounded monthly over 48 months with zero down. If Paula has decided to buy the car with the lower net cost to her, which car should she purchase? (Round numerical values to the nearest cent.)

3.

Suppose that Ramos contributes $4000/year into a traditional IRA earning interest at the rate of 3%/year compounded annually, every year after age 37 until his retirement at age 67. At the same time, his wife Vanessa deposits $2800/year (the amount after paying taxes at the rate of 30%) into a Roth IRA earning interest at the same rate as that of Ramos. Suppose that Ramos withdraws his investment upon retirement at age 67 and that his investment is then taxed at 30%. (Round your answers to the nearest cent.)

(a)

How much will Ramos's investment be worth (after taxes) at that time?

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