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1. (Rate of return of an annuity) Paul's Perfect Peugeot says they'll sell you a brand new Italian"Iron Man" motor scooter for $2,500. Financing is available, and the terms are 10% down and payments of $65.00 a month for 40 months. What annual interest rate is Paul charging you?
2. (Rate of return of an annuity) You would like to have $1,000,000 45 years from now, but the most you can afford to invest each year is $1,000. What annual rate of return will you have to earn to reach your goal?
3. (Monthly loan payment) Best Buy has a flat-screen HDTV on sale for $2,500. If you could borrow that amount from Carl's Credit Union at 12% for 1 year, what would be your monthly loan payments?
This document contains various important questions and their appropriate answers in the subject field of Economics.
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