Loan principal right after the first monthly payment

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1. In order to support your daughter's (son's) college education, you decide to save a fixed amount in a college trust fund at the end of every year for eighteen (18) years. You would like to have $120,000 in the fund eighteen (18) years from today. When the average annual rate of return on the fund is 6 percent (compounded annually), how much do you need to save at the end of each year?

A) $2,844 B) $3,883 C) $4,204 D) $11,083

2. You are taking out a $20,000 auto loan to be paid over 2.5 years in 30 equal monthly payments. Suppose the current APR is 12 percent (compounded monthly). What is the outstanding amount of the loan principal right after the first monthly payment?

A $19,225 B $19,425 C $19,625 D $19,825

Reference no: EM131848028

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