10. Will the effective annual rate ever be equal to the simple (quoted) rate? Explain. 11. Five years ago, you bought a home with a purchase price of $210,000 and you paid 10% of that amount as a down payment and financed the remainder. Your mortgage loan terms are 30 years of monthly payments at an annual rate of 3.24%. Do no interim rounding on the ealculated monthly interest rate. (a) How much are your monthly mortgage payments? (b) Over the life of the original loan, how much would you pay in interest? (e) Remember that you fook this loan out 5y cass ago (60 poyments). You yot a new job and are moving across the country, You wilt be selifing this house and looking at buying something new. Considering the 5 years of payments you hare made, how much do you still owe on your home? 12. You have won a state lontery prize quoted as $$12 million dollar tottery", what this really means is: that if you take the monthly payments of $50,000 for 20 years, you will have a total payout of $12 million. If the appropriate interest (discount) rate is assumed to be 4.8%, APR, what would be the cunti pay out on this lottery today? 13. Angus McScrooge comes to you for financial advice. He is considering adding a downtown parking lot to his holdings. The owner of the property has given MeSerooge four different payment options. Which of the following options would you recommend, and why? Rementer that yoir are diving the buyer here. MeScrooge tells you he can earn 5.8% annual interest, compounded quarterly, on his money, You have no reason to question his assumption. For each option, determine the present value of all relevant cash flows for 0.8 points each and then provide your final answer for 0.8 points (total of 4 points for this problem). 4. Option 1. Pay $35,000 today. b. Option 2. Pay a lump sum of $39,000 at the end of two years. c. Option 3. Pay $4,650 at the end of each quarter for two years. d. Option 4, Pay $,000 immediately plus $34,000 in a lump sum two years from now, e. Which option do you recommend, and why? 10. Will the effective annual rate ever be equal to the simple (quoted) rate? Explain. 11. Five years ago, you bought a home with a purchase price of $210,000 and you paid 10% of that amount as a down payment and financed the remainder. Your mortgage loan terms are 30 years of monthly payments at an annual rate of 3.24%. Do no interim rounding on the ealculated monthly interest rate. (a) How much are your monthly mortgage payments? (b) Over the life of the original loan, how much would you pay in interest? (e) Remember that you fook this loan out 5y cass ago (60 poyments). You yot a new job and are moving across the country, You wilt be selifing this house and looking at buying something new. Considering the 5 years of payments you hare made, how much do you still owe on your home? 12. You have won a state lontery prize quoted as $$12 million dollar tottery", what this really means is: that if you take the monthly payments of $50,000 for 20 years, you will have a total payout of $12 million. If the appropriate interest (discount) rate is assumed to be 4.8%, APR, what would be the cunti pay out on this lottery today? 13. Angus McScrooge comes to you for financial advice. He is considering adding a downtown parking lot to his holdings. The owner of the property has given MeSerooge four different payment options. Which of the following options would you recommend, and why? Rementer that yoir are diving the buyer here. MeScrooge tells you he can earn 5.8% annual interest, compounded quarterly, on his money, You have no reason to question his assumption. For each option, determine the present value of all relevant cash flows for 0.8 points each and then provide your final answer for 0.8 points (total of 4 points for this problem). 4. Option 1. Pay $35,000 today. b. Option 2. Pay a lump sum of $39,000 at the end of two years. c. Option 3. Pay $4,650 at the end of each quarter for two years. d. Option 4, Pay $,000 immediately plus $34,000 in a lump sum two years from now, e. Which option do you recommend, and why