Reference no: EM13490506
1.Suppose you invest $100 in a bank account, and five years later it has grown to $134.39.
a. What APR did you receive, if the interest was compounded semiannually?
b. What APR did you receive if the interest was compounded monthly?
2.Your son has been accepted into college. This college guarantees that your son’s tuition will not increase for the four years he attends college. The first $10,000 tuition payment is due in six months. After that, the same payment is due every six months until you have made a total of eight payments. The college offers a bank account that allows you to withdraw money every six months and has a fixed APR of 4% (semiannual) guaranteed to remain the same over the next four years. How much money must you deposit today if you intend to make no further deposits and would like to make all the tuition payments from this account, leaving the account empty when the last payment is made?
3.You make monthly payments on your mortgage. It has a quoted APR of 5% (monthly compounding). What percentage of the outstanding principal do you pay in interest each month?
4.Capital One is advertising a 60-month, 5.99% APR motorcycle loan. If you need to borrow $8000 to purchase your dream Harley Davidson, what will your monthly payment be?
5.Oppenheimer Bank is offering a 30-year mortgage with an EAR of 5 3 /8%.. If you plan to borrow $150,000, what will your monthly payment be?
6.You have decided to refinance your mortgage. You plan to borrow whatever is outstanding on your current mortgage. The current monthly payment is $2356 and you have made every payment on time. The original term of the mortgage was 30 years, and the mortgage is exactly four years and eight months old. You have just made your monthly payment. The mortgage interest rate is 63⁄8% (APR). How much do you owe on the mortgage today?