Quiz 3 sec 2 (1)

Quiz 3 sec 2 (1) - Write an expression for the lump sum of...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
IE 343 Spring 2010 Name: Section 2, Quiz 3 (last) (first) Closed book, closed notes. No calculators. 1. Imagine you are a parent, and your child is going to college next year. Tuition fees amount to $18,000 a year for 4 years. You plan on depositing a lump sum of money today in a bank account paying 5% interest a year, so that you can make these annual tuition fee payments. The first tuition fee payment you make will be a year from now. Draw a cash-flow diagram depicting cash deposits and withdrawals into the bank account (from your point of view).
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Write an expression for the lump sum of money you deposit now in order to fund these annual tuition fee payments. 2. You’ve just bought a house worth $250,000 here in West Lafayette. As part of the mortgage deal, you have to make a down payment of 20% now. The remaining amount must be paid in equal annual installments for 30 years at the rate of 6% compound interest per year. Write an expression for your annual mortgage payments. Please write any concerns/comments on the back....
View Full Document

This note was uploaded on 02/07/2012 for the course IE 343 taught by Professor Vincent,g during the Spring '08 term at Purdue.

Ask a homework question - tutors are online