4. A Dillonvale, Ohio, man saved pennies for 65 years. When he finally decided to cash...

 

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4. A Dillonvale, Ohio, man saved pennies for 65 years. When he finally decided to cash them in, he had roughly 8 million of them (or $80,000 worth), filling 40 trash cans. On average, the man saved $1,230 worth of pennies a year. If he had deposited the pennies saved each year, at each year's end, into a savings account earning 5 percent compound annual interest, how much would he have had in this account after 65 years of saving? How much more "cents" would this have meant for our "penny saver" compared with simply putting his pennies into trash cans? 5. Xu Lin recently obtained a 10-year, $50,000 loan. The loan carries an 8 percent compound annual interest rate and calls for annual installment payments of $7,451.47 at the end of each of the next 10 years. (a) How much (in dollars) of the first year's payment is principal? (b) How much total interest will be paid over the life of the loan? (Hint: You do not need to construct a loan amortization table to answer this question. Some simple math is all you need.) 4. A Dillonvale, Ohio, man saved pennies for 65 years. When he finally decided to cash them in, he had roughly 8 million of them (or $80,000 worth), filling 40 trash cans. On average, the man saved $1,230 worth of pennies a year. If he had deposited the pennies saved each year, at each year's end, into a savings account earning 5 percent compound annual interest, how much would he have had in this account after 65 years of saving? How much more "cents" would this have meant for our "penny saver" compared with simply putting his pennies into trash cans? 5. Xu Lin recently obtained a 10-year, $50,000 loan. The loan carries an 8 percent compound annual interest rate and calls for annual installment payments of $7,451.47 at the end of each of the next 10 years. (a) How much (in dollars) of the first year's payment is principal? (b) How much total interest will be paid over the life of the loan? (Hint: You do not need to construct a loan amortization table to answer this question. Some simple math is all you need.)