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Rhoda Morgenstern just settled an insurance claim. The settlement calls for increasing payments over a 20-year period. The first payment will be paid one year
Rhoda Morgenstern just settled an insurance claim. The settlement calls for increasing payments over a 20-year period. The first payment will be paid one year from now in the amount of $40,000. The following payments will increase by 2.5 percent annually. What is the value of this settlement to Rhoda today if she can earn 6 percent on her investments? O $558,939 O $1,093,967 O $458,797 O $1,142,857 O $773,240 Tywin Lannister borrows $749,000 from the Iron Bank to buy a small castle for his youngest son. The adjustable rate mortgage carries a 2.5 percent rate for the first 2 years. After that the rate will change annually to reflect market conditions. The annual cap is 3% (i.e., the largest increase in any year is 3%). The loan term is 30 years and payments are made monthly. What is the largest possible mortgage payment Tywin might owe when the interest rate resets at the beginning of the 3rd year? $4,253 O 3,048 O $4,173 $2,108 $2,960
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