Graded Quiz #6 Ch. 10: Mathematics of Finance 1. Mr. and Mrs. Average want to have $15,000 six years from now for their daughter's college expenses. How much must they deposit now into a savings account that pays 2.8% interest compounded quarterly? (4 points) 2. Calculate the future value of an increasing annuity of $200 per month for five years at 12% interest compounded monthly. (4 points) 3. Earl goes to his bank to borrow some money. He can afford a monthly payment of $140. The bank offers a loan at 9.6% compounded monthly. Earl wants to have the loan paid off in four years. What is the greatest amount he can borrow? (6 points) 4. Suppose you take out a mortgage of $240,000 at 3.6% interest compounded monthly. The term of the mortgage is 30 years, with monthly payments. How much money will you owe after 5 years? (8 points) 5. Hugh borrows $8000 from a bank that uses the add-on method. The loan is to be repaid in four years. The interest rate is 3.2%, compounded monthly. (a) How big is Hugh's monthly payment? (3 points) (b) How much money will Hugh pay to the bank over the term of the loan? (2 points) (c) What is the annual percentage rate (APR) for this loan, to the nearest hundredth of a percent? (3 points)