Pick 4 of these 8 questions. (Remember that interests rates…
Pick 4 of these 8 questions. (Remember that interests rates are quoted annually in your answers, not the periodic rates). A. The maximum monthly mortgage payment you can make is $850. The current interest rate is 8.75%. For a mortgage of 25 years, what is the maximum amount of the purchase price that you can finance? N________ I/Y________ PV___________ PMT__________ FV__________ B. What annual interest rate is needed to compound a series of equal payments of $495.66 every month for 2½ years to a total future value of $16,000? N________ I/Y________ PV___________ PMT__________ FV__________ c. What is the initial balance of a loan that can be paid off in one year with payments of $75.94 every month at a 6% stated interest rate? N________ I/Y________ PV___________ PMT__________ FV__________ D. The maximum monthly mortgage payment you can make is $850. The current interest rate is 6.75%. For a mortgage of 20 years, what is the maximum amount of the purchase price that you can finance? N________ I/Y________ PV___________ PMT__________ FV__________ E. You won the lottery and are entitled to receive annual payments of $1 million dollars for the next 20 years starting at the end of the first year or take a lump sum payment of $9,500,000. If you could earn 6% annually on your investments, which option should you choose? (justify the answer) N________ I/Y________ PV___________ PMT__________ FV__________ F. How long does it take to double $5,000 at a rate of 12% per year compounded quarterly? N________ I/Y________ PV___________ PMT__________ FV__________ G. Find the future value 40 years from now of an investment of $7000 today if the interest rate is 6.65% compounded semiannually N________ I/Y________ PV___________ PMT__________ FV__________ H. If you saved $7000 toward retirement each year for 40 years in an IRA, and the assets in that IRA earned 8% per year on average, How much would you have in that account for retirement? N________ I/Y________ PV___________ PMT__________ FV__________ For your answers Write each letter (a, b, c, … for the ones you skip, write “SKIP” for the ones you solve, write your answer and then the support like : $XXX.XX N________ I/Y________ PV___________ PMT__________ FV__________