1) You are considering the purchase of a home that would require a mortgage of $250,000 (i.e. you are borrowing $250,000 from a bank to buy the house. You intend to pay the bank back through equal monthly instalments). Suppose you are interested in the arithmetic sum of all the instalments you pay. How much more in total will you pay if you select a 30-year mortgage with an APR of 5.65% rather than a 15-year mortgage at an APR 4.9%? (Round the monthly payment amount to 2 decimal places.)

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2) A salesperson gives you the following payment plans, "Buy this new car for $30,000 cash OR, with an appropriate down payment, pay $800 per month for 36 months at 5% interest.". If these two offers are financially equivalent at the stated interest rate, calculate the "appropriate" down payment. (Remember, when interest rates are quoted as they are in this question, they are APRs. Also, Financially equivalent means that the two streams of cashflows have the same PV)

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3) You're ready to make the last of four equal, annual payments on a $1,000 loan with a 7.77% interest rate. How much of this last payment is towards paying off accrued interest and how much towards paying off the remaining principal? (Read Amortized Loans section in Chapter 5 in your textbook)

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