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Question 1
Compound Interest and Savings Annuities
Use the information in the chart below on the line that corresponds to your assigned number, to answer the following questions. Be sure to show all the steps you took to reach your answers.
You open a savings account that pays compound interest.
Find the total amount (a/k/a future value) in the compound interest account after five years, assuming no withdrawals are made.
How much of this total amount is interest?
Instead of a compound interest savings account, you set up a savings annuity at the same rate as the compound saving account.
How much will be in the account after five years.
How much of this total in the account is interest?
Use the below numbers:
Total Amount Invested in compound interest account: 5400
Annual Interest Rate: 2.2%
Amount paid into savings annuity account every month for five years: 90
Question 2
Mortgage Monthly Payment and Total Interest
Use the information in the chart below on the line that corresponds to your assigned number, to answer the following questions. Be sure to show all the steps you took to reach your answers.
What will your monthly mortgage payment be? Do not round any intermediate computations. Round your final answer to the nearest cents.
Assuming you take the full term of the mortgage,
how much will you have paid?
how much total interest will you have paid?
what percent of the total that you paid was interest?
Use the below numbers:
Price of house: 430,000
Mortgage Interest Rate: 5.4%
Term of Mortgage in years: 15
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