Solve the following problems based on calculator functions only and show relevant keys as your work. Please type your answers in Word and upload. In order to attempt this assignment, you need to read...

Solve the following problems based on calculator functions only and show relevant keys as your work. Please type your answers in Word and upload.

In order to attempt this assignment, you need to read the book; look at examples at the end of chapter 5 and watch the videos. Please start on this assignment early as this will need some understanding and TIME.

1.
Jorarden Furnitures have a new scheme for selling furniture. You bought some furniture under this new scheme where you pay only $85 per month for four years and this reflects an APR of 18.9% annual (Interest is compounded monthly). What is the total value of furniture that you bought?

2.
You give a loan of $10,000 to your friend to help him pay his pending rent and school fees. The friend has signed a contract with you to pay back $900 per month (at the end of each month) to you for one year. What interest rate you charged your friend on this loan, on annualized basis?

3. 
   Peter decided to buy a used dealer certified car from the authorized car dealer. The car has a sticker price of $12,000 for sale. Peter paid $4,000 down payment and took a loan for remaining amount from his local bank for five years. Peter would need to pay a monthly payment of $158.04 for this car payable at the end of each month to the bank.
   
   
   
   1. 
      
      Calculate the nominal or quoted interest rate charged on this loan (APR).
      
   
   
   2. 
      
      Calculate the effective rate for this loan.
      
      
   
   
   
   


4. 
   Peter is trying to reduce his credit card debt. Currently he has a balance of $5,500 on his AMEX card. This credit card has an APR of 19.9%. Peter can afford to pay only the minimum charge of $100 per month. Peter has decided not to charge this card any more and keep paying the minimum balance till the loan is paid off.
   
   
   
   1. 
      
      How long will it take Peter to pay off this loan by paying $100 per month?
      
   
   
   2. 
      
      How long will it take Peter to pay off his loan by paying $110 per month
      
   
   
   
   


5. 
   Alice and Alex both opened an online brokerage investment account with Robinwood when they both turned 18 years old. Alice started funding this account by saving $100 per month, starting today, at the beginning of the month. Alex started saving $100 a month starting at the end of this month. The money was invested in stocks that generate 8% return. How much money will each have accumulated when they both retire at age 65? (Assume that they both keep saving $100 each month till retirement. Alice saves at beginning of the month and Alex saves at the end of each month)
   


6. 
   You have saved up for retirement in an annuity account. This account earns a return of 9% on annual basis but compounded monthly. You are due to retire in 6 years from now. You will receive monthly payments of $10,000 at the end of each month after retiring, for 15 years. How much have you saved up in this account today?
   


7. 
   You have applied for a loan of $200,000 with 30-year maturity from the Western Bank. The loan officer has given you two choices.
   

   
   Choice A: APR of 6% compounded quarterly
   

   
   

   
   Choice B: APR of 5.98% compounded daily
   

   
   Which loan would you take? Show all calculations to get any credit.
   


8. 
   
   A contract requires you to make a payment of $1,500 immediately upfront and additional four payments of $500 each at the end of next four years. If interest rate on this investment is 6.5%, calculate the present value of the contract?
   


9. 
   Your investment account is expected to earn a 5% return for next two years and then 8% return for next four years after that. You need to withdraw $750 from this account at the end of each month for next six years. After last withdrawal at end of six years, nothing remains in your account. how much is the deposited in this account today? (Assume monthly compounding)
   


10. 
    You just bought a condo for $450,000 and paid $90,000 as down payment. The remaining amount is financed through a loan of 3.5% compounded monthly. The loan is for 30 years. You have to make monthly payments at the end of each month.
    
    
    
    
    1. 
       
       
       
       1. 
          
          What is your monthly payment?
          
          
       
       
       2. 
          
          What is the balance of this loan after ten years?
          
       
       
       3. 
          
          What is the total interest paid on this loan for 15 years