2. Describe the following in your own words. (a) The difference between the n value in...

Transcribed Image Text:

2. Describe the following in your own words. (a) The difference between the n value in the regular compound interest formulas (ex. FV = PV(1+i)") and the annuity formulas (ex. FV = PMT |1+) /2 ] (b) The difference between a general and ordinary annuity. Specifically, give an example of when you need to calculate the iz value. [ /2 ] Screenshot 3. Instead of your daily trip to the coffee shop, you will instead deposit $120 every month into your savings account earning 1.2% compounded monthly. (a) How much will you have saved if you start saving one month from today and continue for 5 years? /3 ] (b) How much interest will you gain in total over the 5 years? (Hint: How much did you deposit in total?) /2 ] 4. You decide to finance a car that costs $15,000 and has a financing rate of 3% compounded annually. How long will this financing loan be if the monthly payments are $325 and you start payments one month from today? /4 ] 2. Describe the following in your own words. (a) The difference between the n value in the regular compound interest formulas (ex. FV = PV(1+i)") and the annuity formulas (ex. FV = PMT |1+) /2 ] (b) The difference between a general and ordinary annuity. Specifically, give an example of when you need to calculate the iz value. [ /2 ] Screenshot 3. Instead of your daily trip to the coffee shop, you will instead deposit $120 every month into your savings account earning 1.2% compounded monthly. (a) How much will you have saved if you start saving one month from today and continue for 5 years? /3 ] (b) How much interest will you gain in total over the 5 years? (Hint: How much did you deposit in total?) /2 ] 4. You decide to finance a car that costs $15,000 and has a financing rate of 3% compounded annually. How long will this financing loan be if the monthly payments are $325 and you start payments one month from today? /4 ]