1. The Johnsons have accumulated a nest egg of$40,000that they intend to use as a down payment toward the purchase of a new house. Because their present gross income has placed them in a relatively high tax bracket, they have decided to invest a minimum of$2700/month in monthly payments (to take advantage of the tax deduction) toward the purchase of their house. However, because of other financial obligations, their monthly payments should not exceed$3300. If local mortgage rates are2.5%/year compounded monthly for a conventional 30-year mortgage, what is the price range of houses that they should consider? (Round your answers to the nearest cent.)

Least Expensive?

Most Expensive?

David owns$25,000worth of 10-year bonds of Ace Corporation. These bonds pay interest every6 monthsat the rate of3%/year (simple interest). How much income will David receive from this investment every6 months?How much interest will David receive over the life of the bonds?

Darla purchased a new car during a special sales promotion by the manufacturer. She secured a loan from the manufacturer in the amount of$16,000at a rate of4.8%/year compounded monthly. Her bank is now charging6.9%/year compounded monthly for new car loans. Assuming that each loan would be amortized by 36 equal monthly installments, determine the amount of interest she would have paid at the end of3 yearsfor each loan. How much less will she have paid in interest payments over the life of the loan by borrowing from the manufacturer instead of her bank? (Round your answers to the nearest cent.)

interest paid to manufacturer?

interest paid to bank?

savings?