Colleen and Bill have just purchased a house for $650,000, with the seller holding a second mortgage of $100,000.They promise to pay the seller $100,000 plus all accrued interest 5 years from now. The seller offers them three interest options on the second mortgage: (a) Simple interest at 12% per annum (b) 11% interest compounded monthly (c) 11% interest compounded
Chapter 5, Section 5.7 #54
Colleen and Bill have just purchased a house for $650,000, with the seller holding a second mortgage of $100,000.They promise to pay the seller $100,000 plus all accrued interest 5 years from now. The seller offers them three interest options on the second mortgage:
(a) Simple interest at 12% per annum
(b) 11½% interest compounded monthly
(c) 11¼% interest compounded continuously
Which option is best; that is, which results in the least interest on the loan?
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Chapter Test:
Review Exercises:
- RE-1
- RE-2
- RE-3
- RE-4
- RE-5
- RE-6
- RE-7
- RE-8
- RE-9
- RE-10
- RE-11
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- RE-100
- RE-101
Section 5.2:
- S5.2-1
- S5.2-2
- S5.2-3
- S5.2-4
- S5.2-5
- S5.2-6
- S5.2-7
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- S5.2-10
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- S5.2-103
Section 5.3:
- S5.3-1
- S5.3-2
- S5.3-3
- S5.3-4
- S5.3-5
- S5.3-6
- S5.3-7
- S5.3-8
- S5.3-9
- S5.3-10
- S5.3-11
- S5.3-12
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- S5.3-14
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- S5.3-24
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- S5.3-27
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- S5.3-124
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Section 5.4:
- S5.4-1
- S5.4-2
- S5.4-3
- S5.4-4
- S5.4-5
- S5.4-6
- S5.4-7
- S5.4-8
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- S5.4-121
- S5.4-122
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- S5.4-131
- S5.4-132
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- S5.4-135
- S5.4-136
Section 5.6:
- S5.6-1
- S5.6-2
- S5.6-3
- S5.6-4
- S5.6-5
- S5.6-6
- S5.6-7
- S5.6-8
- S5.6-9
- S5.6-10
- S5.6-11
- S5.6-12
- S5.6-13
- S5.6-14
- S5.6-15
- S5.6-16
- S5.6-17
- S5.6-18
- S5.6-19
- S5.6-20
- S5.6-21
- S5.6-22
- S5.6-23
- S5.6-24
- S5.6-25
- S5.6-26
- S5.6-27
- S5.6-28
- S5.6-29
- S5.6-30
- S5.6-31
- S5.6-32
- S5.6-33
- S5.6-34
- S5.6-35
- S5.6-36
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- S5.6-38
- S5.6-39
- S5.6-40
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- S5.6-42
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- S5.6-44
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- S5.6-49
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- S5.6-53
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- S5.6-62
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- S5.6-67
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- S5.6-70
- S5.6-71
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- S5.6-75
- S5.6-76
- S5.6-77
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- S5.6-79
- S5.6-80
- S5.6-81
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- S5.6-86
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- S5.6-88
- S5.6-89
- S5.6-90
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- S5.6-92
- S5.6-93
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- S5.6-98
- S5.6-99
- S5.6-100
- S5.6-101
Section 5.7:
- S5.7-1
- S5.7-2
- S5.7-3
- S5.7-4
- S5.7-5
- S5.7-6
- S5.7-7
- S5.7-8
- S5.7-9
- S5.7-10
- S5.7-11
- S5.7-12
- S5.7-13
- S5.7-14
- S5.7-15
- S5.7-16
- S5.7-17
- S5.7-18
- S5.7-19
- S5.7-20
- S5.7-21
- S5.7-22
- S5.7-23
- S5.7-24
- S5.7-25
- S5.7-26
- S5.7-27
- S5.7-28
- S5.7-29
- S5.7-30
- S5.7-31
- S5.7-32
- S5.7-33
- S5.7-34
- S5.7-35
- S5.7-36
- S5.7-37
- S5.7-38
- S5.7-39
- S5.7-40
- S5.7-41
- S5.7-42
- S5.7-43
- S5.7-44
- S5.7-45
- S5.7-46
- S5.7-47
- S5.7-48
- S5.7-49
- S5.7-50
- S5.7-51
- S5.7-52
- S5.7-53
- S5.7-55
- S5.7-56
- S5.7-57
- S5.7-58
- S5.7-59
- S5.7-60
- S5.7-61
- S5.7-62
- S5.7-63
- S5.7-64
- S5.7-65
- S5.7-66
- S5.7-67
- S5.7-68
- S5.7-69
- S5.7-70
- S5.7-71
- S5.7-72
- S5.7-73
- S5.7-74
- S5.7-75
Section 5.8:
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