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1. Your car loan requires payments of $200 per month for the first year and payments of $400 per month during the second year. The

1.Your car loan requires payments of $200 per month for the first year and payments of $400 per month during the second year. The monthly interest rate is 1% and payments begin in one month. What is the present value of this two-year loan?

2.You found your dream house. It will cost you $175,000 and you will put down $35,000 as a down payment. For the rest you get a 30-year, 6.25% mortgage. What will be your monthly mortgage payment (assume no early repayment)?

3.

  1. Which of the following will increase the present value of an annuity, other things equal?

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