1.Your friend tells you he has a very simple trick for taking one-third off the time it takes to repay your mortgage: Use your Christmas bonus to make an extra payment on January 1 of each year ( that is, pay your monthly payment due on that day twice). If you take out your mortgage on July 1, so your first monthly payment is due August 1, and you make an extra payment every January 1, how long (in years) will it take to pay off he mortgage? Assume that the mortgage has an original term of 30 years and an APR of 8.4%. (Hint: The original balance does not matter in this problem, so you can pick any number you want. In this case we will use $100,000 as the principal balance.) Round to three decimal places.

2.You have been offered a job with an unusual bonus structure. As long as you stay with the firm, you will get an extra $70,000 every seven years, starting seven years from now. What is the present value of this incentive if you plan to work for the company for 42 years and the interest rate is 6.5% (EAR)? (Note: Be careful not to round any intermediate steps less than six decimal places.)

3.Suppose Capital One is advertising a 60-month, 5.88% APR motorcycle loan. If you need to borrow $7500 to purchase your dream Harley Davidson, what will be your monthly payment? (Dont round intermediate steps to six decimal places)

4.You have been accepted into college. The college guarantees that your tuition will not increase for the four years you attend college. The first 12,000 tuition payment is due in six months. After that, the same payment is due every six months until you have made a total of eight payments. The college offers a bank account that allows you to withdraw money every six months and has a fixed APR of 4.1% ( with semiannual compounding) guaranteed to remain the same over the next four years. How much money must you deposit today if you intend to make no further deposits and would like to make all the tuition payments from this account, leaving the account empty when the last payment is made?(Note: Be careful not to round any intermediate steps less than six decimal places.)

5.You are considering two ways of financing a spring break vacation. You could put it on your credit card, at 14% APR, compounded monthly, or borrow the money from your parents, who want an interest payment of 10% every six months. which is the lower rate? (Dont round intermediate steps less than six decimal places)

6.Your bank account pays interest with an EAR of 9 %. What is the APR quote for this account based on semiannual compounding? What is the ARP with monthly compounding?

7.You have some extra cash this month and you are considering putting it toward your car loan. your interest rate is 6.6%, your loan payments are $664 per month, and you have 36 months left on your loan. If you pay an additional $1,500 with your next regular $653 payment (due in one month), how much will it reduce the amount of time left to pay off your loan? (Be careful not to round any intermediate steps less than 6 decimal places.)

8..You have an outstanding student loan with required payments of $600 per

month for the next four years. The interest rate on the loan is 10% APR

(monthly). Now that you realize your best investment is to prepay your student loan you decide to prepay as much as you can each month looking at your budget,you can afford to pay an extra $200 a month in addition to your required monthly payments of $600,or $800 in total each month how long will it take you to pay off loan(steps less than six decimal).