Compounded the rate continuously rather than annually

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1. You borrow $210,000 to purchase a home. The terms of the loan call for monthly payments over 30 years at a mortgage rate of 4.50 percent. What percentage of your first 60 months' total payments go toward interest?

A. 82 percent

B. 66 percent

C. 71 percent

D. 59 percent

2. You are going to loan a friend $26,000 for one year at an interest rate of 9.5 percent, compounded annually. How much additional interest could you have earned if you had compounded the rate continuously rather than annually?

A. $66.67

B. $121.13

C. $99.47

D. $83.84

Reference no: EM131959758

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