BONUS - \$792.95(at year 1 year 2 and year 3 If the credit...

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NAMES: 1) _________________ 2) _________________ 3) _________________ 4) _________________ 5) _________________ 6) _________________ Question 1: You just got a mortgage for \$200,000. The terms of the mortgage state that you will make equal monthly payments starting next month for 30 years. The stated annual interest rate on the mortgage is 9% per year. After you made your payment 10 years from today, what is the total amount of your payments that has gone towards paying interest? Question 2: You are trying to pay off a credit card that currently has a \$1,000 balance on it. You plan on doing this by paying \$50 a month starting today. In addition, you plan on paying for books and supplies with your credit card every year for the next three years of
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Unformatted text preview: \$792.95 (at year 1, year 2 and year 3). If the credit card company gives you an annual rate of 12% per year, how many years until your credit card is paid off? Question 3: You are a marketing executive looking to see if you wish to take on a new project. Your boss tells you that in order to take on a project, the company must earn at least 10% (effective) per year. The project would have an initial cost of \$500,000 and another cost one year from today of \$200,000. The project would start to generate cash three years from today and would have an equal stream of cash every month forever. How much cash does this project need to generate in order to get that 10% effective rate of return?...
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