Reference no: EM132914824

a) James Rivera earned his degree in drafting at a community college and recently began his new career. He was happy to learn that his new employer will deposit $2500 into his 401(k) retirement account at the end of each year. Find the amount he will have accumulated in 15 years if funds earn 8% per year.

b) James Rivera from Exercise 5 has also decided to invest $1000 at the end of each 6 months in an IRA that grows tax deferred. Find the amount he will have accumulated if he does this for 15 years and earns 6% compounded semiannually.

c) Betty Yowski borrows money for a new swimming pool and hot tub. She agrees to repay the note with a payment of $1200 per quarter for 6 years. Find the amount she must set aside today to satisfy this capital requirement in an account earning 8% compounded quarterly.

d) Dan and Mary Foster just divorced. The divorce settlement included $650 a month payment to Dan for the 4 years until their son turns 18. Find the amount Mary must set aside today in an account earning 12% per year compounded monthly to satisfy this financial obligation.

e) The owner of Hickory Bar-B-Que plans to open a new restaurant in 4 years at a cost of $200,000. Find the required semiannual payment into a sinking fund if funds are invested in an account earning 6% per year compounded semiannually.

f) Lupe Martinez will owe her retired mother $45,000 for a piece of land. Find the required quarterly payment into a sinking fund if Lupe pays it off in 4 years and the interest rate is 10% per year compounded quarterly.

g) Jenson SawLogs borrows $34,500 to buy a new electric generator. The company agrees to make quarterly payments for 2 years at 10% per year. Find the amount of the quarterly payment and total amount interest paid over 2 years.

h) Scented Candles remodeled its lobby at a cost of $36,000. It pays $6000 down and pays off the balance in payments made at the end of each quarter for 5 years. Interest is 10% com- pounded quarterly. Find the amount of each payment so that the loan is fully amortized and total amount of interest paid for 5 years.

i) Mayberry Pets borrows to purchase a van to transport animals and supplies. They agree to make quarterly payments on the $22,400 debt for 3 years at a rate of 8% compounded quarterly. Find (a) the quarterly payment and (b) the total amount of interest paid.