MAT 0460 PREP FOR ANNUITIES: PRESENT VALUE Identify the present value P, the regular payment R, the interest rate per period i, and the number of periods n for each of the following annuity examples. 1. If you pay $25 each month on a credit card charging 18% interest with a starting balance of $500, it will take 2 years to pay off this debt (ignoring fees or future charges). . A successful graduate donates $100,000 to her college to support scholarships. If this money in invested in an account earning 6% each year, the college can offer $12,000 of assistance to students each year for 12 years. 3. To finance the purchase of a $8000 car, you can make payments of $136 each month for 6 years (at an interest rate of 7%). 4. Consider the car loan in the previous question. a) What is the total amount paid over the life of the loan? b) How much interest is paid over the life of the loan? C) Suppose you invest in an ordinary annuity to purchase this car. How much should you deposit each month in an account earning 3.5% interest to pay for the car in 6 years? d) What is the total amount deposited in the ordinary annuity in part c