Fill out the chart to compare two options for a $180,000 mortgage with monthly payments. Option 1: 30-year loan at an APR of 4.65% Option 2: 15-year loan at an APR of 3.85%

Monthly payment: Monthly payment:

PV = PV =

PMT = PMT=

FV = FV =

APR = APR =

Periods = Periods =

Compounding: Compounding:

Total payment: Total payment:

Percent of total payment that Percent of total payment that toward principal: went toward principal:

Percent of total payment that went toward Percent of total payment toward Interest: that went toward interest:

Describe a situation where Describe a situation where

Option 1 would be a Option 2 would be a better choice for someone: better choice for someone:

2. Suppose you can afford a $350 monthly car payment. How much can you afford to finance at 4.75% APR for 5 years?

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3. You deposit $350 a month into an account earning an APR of 2.3% compounded monthly. How much will you have at the end of 5 years?

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4. You are buying a new car and need a loan for $20,000. The dealership offers you a 4-year loan with an interest rate of 3.79%. What would your monthly payments be?

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5. Your great-grandfather leaves you an inheritance of $10,000. You deposit it in an account earning an APR of 4% compounded daily. How much will be in the account after 40 years?

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6. You want to save up $15,000 for a down payment on a house. How much would you have to deposit each month into an account with an APR of 3.2% in order to accumulate the down payment in 5 years?

PV = PMT = FV = APR = Periods = Compounding: