Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can someone help me with these problems? You would like to have $4,500 in 4 years for a special vacation following graduation by making deposits

Can someone help me with these problems?

image text in transcribedimage text in transcribed
You would like to have $4,500 in 4 years for a special vacation following graduation by making deposits at the end of every six months in an annuity that pays 4.5% compounded semiannually. a. Use one of the formulas below to determine how much you should deposit at the end of every six months. r nt r P 1 + 1 A n n ' f P ' # F \"\"31 \"l b. How much of the $4,500 comes from deposits and how much comes from interest? a. In order to have $4,500 in 4 years, you should deposit $ at the end of every six months. (Do not round until the nal answer. Then round up to the nearest dollar.) b. $E| of the $4,500 comes from your deposits and $E| comes from interest. (Use the answer from part a to nd this answer. Round to the nearest dollar as needed.) The price of a home is $200,000. The bank requires a 15% down payment. The buyer is offered two mortgage options: 15-year xed at 7% or 30-year xed at 7%. Calculate the amount of interest paid for each option. How much does the buyer save in interest with the 15-year option? Use the following formula to determine the regular payment amount. Flt] r -nt 1w n PMT= Find the monthly payment for the 15year option. 35D (Round to the nearest dollar as needed.) Find the monthly payment for the 30-year option. $ (Round to the nearest dollar as needed.) Calculate the total cost of interest for both mortgage options. How much does the buyer save in interest with the 15-year option? $D (Use the answers from parts 1 and 2 to nd this answer.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting An Introduction

Authors: Pauline Weetman

4th Edition

0273703404, 978-0273703402

More Books

Students also viewed these Accounting questions

Question

4. What is the goal of the others in the network?

Answered: 1 week ago

Question

2. What we can learn from the past

Answered: 1 week ago