1. Rework Exercise 26 for a Roth IRA.
Refer Exercise 26,
Elisa, age 60, is currently in the 30% tax bracket and has $30,000 in a traditional IRA that earns 6% interest compounded annually. She anticipates being in the 35% tax bracket 5 years from now.
2. Consumer Loan A consumer loan of $5000 for 2 years has an APR of 9% compounded monthly and a monthly payment of $228.42. What interest rate would be stated with the add-on method?
3. Comparing Loans Spike is considering purchasing a new computer and has decided to take one of two consumer loans:
Consumer Loan A: 1 year, $3000, 10% APR, monthly payment of $263.75
Consumer Loan B: 1 year, $3000, 6% add-on interest
Which loan should Spike take and why?