1 You are thinking of purchasing a house. The house costs

$300,000.

You have

$43,000

in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a

30-year

mortgage that requires annual payments and has an interest rate of 7%

per year. What will your annual payment be if you sign up for this mortgage?

2.Your grandmother bought an annuity from Rock Solid Life Insurance Company for

$240,000

when she retired. In exchange for the

$240,000,

Rock Solid will pay her

$50,000

per year until she dies. The interest rate is

6%.

How long must she live after the day she retired to come out ahead (that is, to get more in value than what she paid in)?