Question

E.

You deposit $7,000 in an account in 4 years from today earning 5% APR. After 12 years from today, you

make another deposit into the same account.

Twenty-five years from today, the account balance is

$38,952.18. Assuming

quarterly

compounding, what was the amount of the deposit at the end of year 12? (8

points)

F.

You bought a house for 200,000. The bank required a 25% down payment and gave you a 30-year mortgage

loan for the remainder. Assume an annual interest rate of 5% and a monthly repayment schedule (9 points).

a.

What is the amount of the mortgage?

b.

What is your monthly payment?

c.

After 19 years of payments, how much do you still owe?

G.

You bought an expensive TV last year for $900 and charged it to your credit card that charged 22% APR. You

will be diligent in sending monthly payments in an amount that would retire the card balance in exactly 5

years. After 3 years of payments, you plan to refinance the then remaining balance to a new card that

charges an APR of 12%. After that 3 years, you can afford a higher monthly payment of $40. (9 points)

a.

What is the amount of the initial monthly payments?

b.

What is the balance that will get transferred to the new card after 3 years?

c.

How many months will it take to pay off the credit card balance with the

new $40 payment assuming no other purchases?

Answer 1

Note: I have provided the answer in the attachment below for the question (E). As I know it better than the rest. Hope it helps.