1. How much interest would you earn if you deposited $500 at 5% interest for 27 months? Assume interest compounded annually.
2. You take out a 30 year mortgage for $500,000 at 5%. You plan to pay off the mortgage in full after making your 60th monthly mortgage payment. What is the amount of principal left on the mortgage after the 60th monthly payment? Assume normal amortization.
3. You just inherited $9,000 and plan to save it for 6 years. What is the future value of $9,000 at 5% interest after 6 years? Assume interest compounded annually.
4. You want to buy a new boat in 3 years that will cost $5,000 You can earn 5% interest on your money . Mom offers to give you a lump sum today for the boat. How much does mom need to give you today so you can have $5,000 in 3 years?
5. You are planning to retire today. How much do you need to deposit into an investment account today in order to withdraw $10,000 per year for 20 years? Assume a 5% simple annual interest rate and a $0 balance at the end of 20 years.

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