1. Morton notes that the $55,000 invested in the single-premium life insurance policy would grow to $176,392 in 20 years for a return of 6 percent a year. Explain how this return was calculated.

2. In order to reposition the equity in his home, Studebaker would have to Finish attem take out a 30-year, $75,000 mortgage at 9 percent. Explain how the yearly mortgage payments on this loan were obtained