1.You have a choice between a 30-year fixed rate loan at 4.5% and an adjustable rate mortgage (ARM) with a first year rate of 3%. Neglecting compounding and changes in principal, estimate your monthly savings with the ARM during the first year on a $225, 000 loan. Suppose that the ARM rate rises to 10.5% at the start of the third year. Approximately how much extra will you then be paying over what you would have paid if you had taken the fixed rate loan?

What is the approximate monthly savings with the ARM during the first year?

2. Find the savings plan balance after 4 years with an APR of 4% and monthly payments of $200.The balance is $?

3.How much must be deposited today into the following account in order to have $ 75, 000 in8years for a down payment on a house? Assume no additional deposits are made.An account with monthly compounding and an APR of 7%. How much should be deposited today?

4. Suppose you start saving today for a $ 40, 000 down payment that you plan to make on a house in 7 years. Assume that you make no deposits into the account after the initial deposit. For the account described below, how much would you have to deposit now to reach your $ 40, 000 goal in 7 years.An account with daily compounding and an APR of 5%.You should invest $

5.Find the savings plan balance after 4 years with an APR of 4% and monthly payments of $200.

The balance is $

6. Compute the total and annual returns on the described investment.

Four years after buying 200 shares of XYZ stock for $40 per share, you sell the stock for $ 12, 100.

a.The total return is %

b. The annual return is %