Question: 1. Time for a lump sum to double How long will it take $600 to double if it earns the following rates? Compounding occurs once

1. Time for a lump sum to double

How long will it take $600 to double if it earns the following rates? Compounding occurs once a year. Round each answer to two decimal places.

7%.

answer: ______ year(s)

9%.

answer: ______year(s)

19%.

answer: _______year(s)

100%.

answer: ______ year(s)

2. Loan amortization

Jan sold her house on December 31 and took a $25,000 mortgage as part of the payment. The 10-year mortgage has a 11% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B of her IRS Form 1040 the amount of interest that was included in the two payments she received during the year.

What is the dollar amount of each payment Jan receives? Round your answer to the nearest cent. answer: $____

How much interest was included in the first payment? Round your answer to the nearest cent. answer: $____

How much repayment of principal was included? Round your answer to the nearest cent. answer: $____

How much interest must Jan report on Schedule B for the first year? Round your answer to the nearest cent. answer: $____

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