1. Molly purchases a retirement annuity that will pay her $2,000 at the end of every six months for the first twelve years and $400 at the end of every month for the next five years. The annuity earns interest at a rate of 4.6% compounded quarterly.

a. What was the purchase price of the annuity?

Round to the nearest cent

b. How much interest did Molly receive from the annuity?

2.

Leah planned to buy a house but could afford to pay only $10,500 at the end of every 6 months for a mortgage with an interest rate of 3.40% compounded semi-annually for 30 years. She paid $28,000 as a down payment.

a. What was the maximum amount she could afford to pay for a house?

b. What was her total investment through the mortgage period (not taking the time-value of money into account)?

c. What was the total amount of interest paid through the mortgage period?