Homework help

You wish to go to Singapore for a vacation and estimate that for this vacation, you need $1,000. You want this vacation to happen in 4 years, and you can make a regular deposit of $2,000 at the end of each year into fixed deposits that pay 10% annually. Will you have enough to cover your vacation expenses?

a) would the outcome be different if you deposit your savings at the beginning of each year?

b) how much would you have to save at the end of each year if your parents tell you that they are willing to finance one-quarter of your vacation expenses?

c) If you borrow $1,000 from your friend today to go for vacationand agree to pay her back $1,200 after one month, what are the annual percentage rate and effective annual rate that you are paying?

d) If you change your mind and decide to buy a new house for which you take a 30-year, 10 percent mortgage loan of $15,000. Your mortgage payments, which are made at the end of each year (one payment each year), include both principal and 10 percent interest on the declining balance. How large will your annual payments be? How much of your second payment goes towards interest payment, and how much towards the repayment of the principal amount?