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10. Josephine found her dream mountain home, valued at $285,000. She plans to buy a home just like it when she retires in 18 years,
10. Josephine found her dream mountain home, valued at $285,000. She plans to buy a home just like it when she retires in 18 years, Josephine can earn 6.75% per year on her investments. The price of the house will increase 2.50% per year for the next 18 years. How much must she invest at the end of each month for the next 18 years to make the purchase at the end of the 18th year? A. more than $1,190 B. more than $1,115, but less than $1,190 C. more than $1,040, but less than $1,115 D. more than $965, but less than $1,040 E. less than $965 11. Alfred has just signed the paperwork on a $215,000 mortgage that calls for monthly payments over 30 years at an annual rate interest rate of 4.86%. Suppose that Alfred decides to pay off his mortgage in 25 years, starting with the first month of payments. How much interest expense does he save by reducing his term by five years? A. more than $37,250 B. more than $35,850, but less than $37,250 C. more than $34,100, but less than $35,850 D. more than $32,750, but less than $34,100 E. less than $32,750 12, Misty Water, Inc. is planning to borrow $200,000 on a 5-year, 7.25%, annual payment, fully amortized term loan. How much of the payment made at the end of the first year will represent payment of principal for Misty Water? A. $14,500 B. $29,832 C. $34,605 D. $37,114 E $49,105
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