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You are thinking of purchasing a house. The house costs $200,000. You have $29,000 in cash that you can use as a down payment on
You are thinking of purchasing a house. The house costs $200,000. You have $29,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 5% per year. What will be your annual payment if you sign this mortgage? The annual payment is $ (Round to the nearest dollar.) You are saving for retirement. To live comfortably, you decide you will need to save $3 million by the time you are 65. Today is your 35th birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 5%, how much must you set aside each year to make sure that you will have $3 million in the account on your 65th birthday? The amount to deposit each year is $ (Round to the nearest dollar.) A local bank is running the following advertisement in the newspaper: "For just $5,000 we will pay you $350 forever!" The fine print in the ad says that for a $5,000 deposit, the bank will pay $350 every year in perpetuity, starting one year after the deposit is made. What interest rate is the bank advertising (what is the rate of return of this investment)? The interest rate the bank is advertising is %. (Round to the nearest integer.)
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