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1) You've won the lottery and will receive ten thousand dollars per year, paid semiannually, for the next fifty

years. I f the appropriate discount rate is 10%, what is the present value of your winning?

2) It's finally time to buy that new SUV you've been wanting. The price is thirty-five thousand dollars, you put five thousand dollars down and finance the rest at 6% interest over six years with monthly payments.

a) How much is each monthly payment?

b) How much interest did you pay the second year?

c) What is the total interest paid over the entire six years of the loan.

3) I want to create a six column amortization schedule for the car loan in problem 2 and also complete the first three months amortization.

4) Your first home purchase is financed by a conventional lender, which must follow regulation Z guidelines. The home purchase price is $250,000, you put 20$% down, and finance the balance at 9% for twenty five years but all due at the end of the tenth year.

a) How much each is each monthly payment

b) What is the dollar amount of the points

c) To the nearest one-tenth of a percent, what is the loan's APR?

Top Answer

Ans 1. $198,479.10. Ans 2. a) 497.19. b) Second year... View the full answer


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