1. Annuity Interest Rate (LG8)
What annual interest rate would you need to earn if you wanted a $600 per month contribution to grow to $54,500 in six years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
2. Investing for Retirement
Monica has decided that she wants to build enough retirement wealth that, if invested at 9 percent per year, will provide her with $4,500 of monthly income for 25 years. To date, she has saved nothing, but she still has 30 years until she retires.
How much money does she need to contribute per month to reach her goal? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Contribute per month $
3. Solving for Rates (LG7)
What annual rate of return is earned on a $1,000 investment when it grows to $2,300 in six years? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Annual rate of return %
4. EAR of Add-On Interest Loan (LG7, LG8)
To borrow $3,000, you are offered an add-on interest loan at 11 percent with 12 monthly payments.
Compute the 12 equal payments. (Round your answer to 2 decimal places.)
Equal payment $
Compute the EAR of the loan. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
EAR %