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In Exercises 1-12, the principal represents an amount of money deposited in a savings account subject to compound interest at the given rate. a. Find how much money there will be in the account after the given number of years. (Assume 360 days in a year.) b. Find the interest earned. Round answers to the nearest cent.$$ \begin{array}{|l|l|l|l|} \hline \text { 9. } \$ 1500 & 8.5 \% & \text { daily } & 2.5 \text { years } \end{array} $$

a single man with a taxable income of \(\$ 15,000\) and a \(\$ 2500\) tax credit

In Exercises 1-10, use $$ P M T=\frac{P\left(\frac{r}{n}\right)}{\left[1-\left(1+\frac{r}{n}\right)^{-n t}\right]} . $$ Round answers to the nearest dollar. Suppose that you are buying a car for \(\$ 60,000\), including taxes and license fees. You saved \(\$ 10,000\) for a down payment. The dealer is offering you two incentives: Incentive \(\mathrm{A}\) is \(\$ 5000\) off the price of the car, followed by a five-year loan at \(7.34 \%\). Incentive B does not have a cash rebate, but provides free financing (no interest) over five years. What is the difference in monthly payments between the two offers? Which incentive is the better deal?10. Suppose that you are buying a car for \(\$ 56,000\), including taxes and license fees. You saved \(\$ 8000\) for a down payment. The dealer is offering you two incentives: Incentive \(A\) is \(\$ 10,000\) off the price of the car, followed by a four-year loan at \(12.5 \%\). Incentive B does not have a cash rebate, but provides free financing (no interest) over four years. What is the difference in monthly payments between the two offers? Which incentive is the better deal?

In Exercises 1-12, the principal represents an amount of money deposited in a savings account subject to compound interest at the given rate. a. Find how much money there will be in the account after the given number of years. (Assume 360 days in a year.) b. Find the interest earned. Round answers to the nearest cent.$$ \begin{array}{|l|l|l|l|} \hline \text { 10. } \$ 1200 & 8.5 \% & \text { daily } & 3.5 \text { years } \\\ \hline \end{array} $$

a married couple filing jointly with a taxable income of \(\$ 250,000\) and a \(\$ 7500\) tax credit

Describe the difference between a fixed installment loan and an open-end installment loan.

In Exercises 11-14, use the formula $$ A=\frac{P\left[\left(1+\frac{r}{n}\right)^{n t}-1\right]}{\left(\frac{r}{n}\right)} $$ Round all computations to the nearest dollar. Suppose that you drive 40,000 miles per year and gas averages \(\$ 4\) per gallon. a. What will you save in annual fuel expenses by owning a hybrid car averaging 40 miles per gallon rather than an SUV averaging 16 miles per gallon? b. If you deposit your monthly fuel savings at the end of each month into an annuity that pays \(5.2 \%\) compounded monthly, how much will you have saved at the end of six years?

Use this advice from most financial advisers to solve Exercises 11-12. \- Spend no more than \(28 \%\) of your gross monthly income for your mortgage payment. \- Spend no more than \(36 \%\) of your gross monthly income for your total monthly debt. Round all computations to the nearest dollar. Suppose that your gross annual income is \(\$ 36,000\). a. What is the maximum amount you should spend each month on a mortgage payment? b. What is the maximum amount you should spend each month for total credit obligations? c. If your monthly mortgage payment is \(70 \%\) of the maximum you can afford, what is the maximum amount you should spend each month for all other debt?

Suppose that you drive 15,000 miles per year and gas averages \(\$ 3.50\) per gallon. a. What will you save in annual fuel expenses by owning a hybrid car averaging 60 miles per gallon rather than an SUV averaging 15 miles per gallon? b. If you deposit your monthly fuel savings at the end of each month into an annuity that pays \(5.7 \%\) compounded monthly, how much will you have saved at the end of six years?

What is a mortgage?