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1.2.3.4, in excel. I'm not sure if I've done the formulas correctly. I use (=formula text)next to the cells.

1. How much do you need to save each year in order to accumulate $50,000 for a down payment on a house in 15 years? Assume that you can earn 3% interest. If interest rates suddenly increased to 896, what would that do the amount that you needed to save each year? Calculate this using the PMT function and by using goal seek. Create a table for each scenario to show how your deposits will accumulate. 2. Let's assume that you are turning 22 tomorrow and that you want to retire on your 55th birthday. You estimate that you will need $100,000 per year while you are retired. If you live until your 79th birthday how much will you need to have saved when you turn 55? How much will you have to save each year in order to have enough to retire when you are 55? Assume that you can earn an 8% return on your savings 3. You decide to take advantage of the dealers 0.9% financing to purchase your next new car. You negotiate a price of $32,000 for the car of your dreams and put $8,000 down, borrowing the rest on a 36- month loan. Calculate your monthly payment using excels PMT function, then create an amortization table for your loan showing the payoff of your loan over time. How much interest do you pay in month 5? How much interest do you pay in month 35? Why the difference? 4. Vern's furniture is offering "1 year same as cash" financing on all Lay-Z boy recliners. If you pay cash today, you can get a 12% discount, but if you want to get "free" credit, you can pay the full price in one year. Your favorite recliner has a sticker price of $2,500. Make a cash flow table illustrating the cash flows associated with your purchase, calculate the differential cash flows and the EAIR on the "free financing". What's the effective annual interest rate? Your per year, with interest compounded month brother tells you that "free" financing is never free. He offers to loan you the money for 11% interest ly. You could borrow the money from him now, and pay it back with interest at the end of the year. What is the EAIR of your brothers loan? Should you take the brothers loan or the dealers free financing

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