Description
Question 1 :
After placing $13,000 in a savings account paying annualcompound interest of 3%, Leona will accumulate what amount if she leaves themoney in the bank for 4 years?
Question 2:
Much to your surprise, you were selected to appear on the TVshow, “The Price is Right.” As a result of your prowess inidentifying how many rolls of toilet paper an average American family keeps onhand, you win the opportunity to choose one of the following: $2,000 today,$10,000 in 10 years, or $31,000 in 29 years. Assuming you can earn 12% on yourmoney, which should you choose?
Question 3:
Alex Karez has taken out a loan of $180,000 with an annualrate of 10% compounded monthly to pay off hospital bills from his wifesillness. If the most Alex can afford to pay is $3,500 a month, how long will ittake to pay off the loan? How long will it take to pay off the loan if he canpay $4,000 each month? Use five decimal places for the monthly percentage ratein your calculations. If Alex can pay $3,500 a month, how many years will ittake to pay off the loan?
Question 4:
To buy a new house, you must borrow $150,000. To do this,you take out a $150,000, 20-year, 10% mortgage. Your mortgage payments, whichare made at the end of each year (one payment each year), include bothprinciple and 10% interest on the declining balance. What amount will yourannual payment be?
Question 5:
You are given three investment alternatives to analyze. Thecash flows from these three investments are as follows:
