3. Harold invested $700 at a 4.5% interest rate compounded annually. How long will it take for the investment to have a future value of approximately $1400?
4. Nick wants to purchase a new car that costs $31,000 (all fees and taxes included). He wants to pay the car off in 5 years. The dealership gives him two options. He can either:
Option 1: get $5200 off the total price of the car, with a bank loan for the remainder at an interest rate of 7.9% per year, compounded monthly; or
Option 2: get no money off the price of the car with a loan from the car company at an interest rate of 1.9% per year compounded monthly.
Determine:
a) the monthly payment for each option.
b) the difference in the monthly payment between the two options.