Question
a) A couple has just purchased a home for $346,000.00. They will pay 20% down in cash, and finance the remaining balance. The mortgage broker
a)
A couple has just purchased a home for $346,000.00. They will pay 20% down in cash, and finance the remaining balance. The mortgage broker has gotten them a mortgage rate of 5.40% APR with monthly compounding. The mortgage has a term of 30 years.
How much interest is paid in the first year?
b)
A couple is saving for retirement with three different accounts. The table below shows the current balances in their accounts, along with their yearly contribution, and the yearly return on each account. The couple will retire in 22.00 years and pool the money into a savings account that pays 4.00% APR. They plan on living for 28.00 more years and making their yearly withdrawals at the beginning of the year. What will be their yearly withdrawal?
| Account | Balance | Yearly Contribution | APR |
|---|---|---|---|
| Fidelity Mutual Fund | $21,640.00 | $1,000.00 | 6.00% |
| Vanguard Mutual Fund | $190,306.00 | $10,000.00 | 7.00% |
| Employer 401k | $320,694.00 | $15,000.00 | 5.00% |
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Investments An Introduction
Authors: Herbert B Mayo
9th Edition
324561385, 978-0324561388
