1-

On second thought, Emphatically Square and heirs will receive $1,000 a year forever that will grow by 3 percent annually. The longterm annual expected interest rate is 7 percent. What is the current worth of this annuity? (Use a Financial calculator to arrive at the answer.)

Annuity paid $ ___________

2

Deidre Hall can afford monthly payments of $690 on a mortgage. Current mortgage rates are 3.5 percent, compounded semiannually. The longest period over which a mortgage can be amortized is 25 years. (Use a Financial calculator to arrive at the answers. Do not round intermediate calculations and round the final answer to nearest whole dollar.)

What size mortgage can Deidre afford?

Affordable mortgage $ __________