I. Compute the future value amounts (rounded to the nearest dollar) in each of the following situations: a. A $20,000 lump-sum investment today that will earn interest at 10% compounded annually over five years. b. A $8,000 lump-sum investment today that will earn interest at 8% compounded quarterly to provide money for a child's college education 15 years from now.

II. Nathan Smith has just purchased a new car for $28,000. He paid $8,000 down and signed a note for the remaining $20,000. The interest rate on the note is 12% compounded monthly, or 1% per month.

Required:

1. Compute the amount of Mr. Smith's monthly payment if he plans to pay off the $20,000 note in 30 monthly payments. Remember: The interest rate is 1% per month 2. Repeat part (1) assuming that Mr. Smith wishes to repay the note in 60 monthly payments. 3. Assume that Mr. Smith decides to repay the note in 60 monthly payments. What is the balance remaining on the note immediately after he makes the 30th payment? Hint: Compute the present value of the remaining 30 payments.