You are given the following situations:
1. Thomas Petry owes a debt of $7,000 from the purchase of a boat. The debt bears interest of 12% payable annually. Petry will pay the debt and interest in five annual installments beginning in one year. Calculate the equal annual installments that will pay off the debt and interest at 12% on the unpaid balance.
2. On January 1, 2007 John Cothran offers to buy Ruth House’s used tractor and equipment for $4,000 payable in 12 equal semiannual installments, which are to include payment of 10% interest on the unpaid balance and payment of a portion of the principal, with the first installment to be made on January 1, 2007. Calculate the amount of each of these installments.
3. Nadine Love invests in a $60,000 annuity at 12% compounded annually on March 1, 2007. The first of 15 receipts from the annuity is payable to Love on March 1, 2017, 10 years after the annuity is purchased and on the date Love expects to retire. Calculate the amount of each of the 15 equal annual receipts.
Using the appropriate tables, solve each of the preceding situations.
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