1. Suppose you determine that you will need $2 million dollars in a retirement account in order to retire comfortably in 45 years. How much should you deposit monthly in an account that pays 7% compounded monthly (so n=12) in order to achieve this goal?
You should deposit $________each month. (Enter a number rounded to two decimal places.)
2. You pay $8,000 for a municipal bond. When it matures after 20 years you receive $12,500. Compute the total and annual returns.
The total return is _________%. (Enter a percent rounded to two decimal places.)
The annual return is ________%. Enter a percent rouded to two decimal places.)
3. The town of Escalon is issuing 10-year savings bonds so that they can build a new hospital. When the bonds mature the town will owe $3,250,000 to the bondholders. How much will the town need to deposit each quarter (so n=4) into a savings account with an APR of 2.25% in order to have enough to pay the bondholders upon maturity?
The town should deposit $_________ each month. (Enter a number rounded to two decimal places.)