Using a financial calculator, provide a solution to each of the following situations.
(a) Tina Deboer owes a debt of $42,000 from the purchase of her new sport utility vehicle. The debt bears annual interest of 7.8% compounded monthly. Tina wishes to pay the debt and interest in equal monthly payments over 8 years, beginning one month hence. What equal monthly payments will pay off the debt and interest?
(b) On January 1, 2014, Danny Herron offers to buy Mark Jacobs’ used snowmobile for $8,000, payable in five equal annual installments, which are to include 7.25% interest on the unpaid balance and a portion of the principal. If the first payment is to be made on December 31, 2014, how much will each payment be?