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# Problem Set 2 Instructions Question 1 A has 1 and 2 Question 1 B has 1 and 2. Question 2 A has one question

## Problem Set 2 Instructions Question 1 A has 1 and 2 Question 1 B has 1 and 2. Question 2 A has one question Question 2 B has 1, 2, 3 Question 1 Compound Interest and Savings Annuities Use the information in the chart below on the line that corresponds to your assigned number, to answer the following questions. Be sure to show all the steps you took to reach your answers. A. You open a savings account that pays compound interest. a. Find the total amount (a/k/a future value) in the compound interest account after five years, assuming no withdrawals are made. b. How much of this total amount is interest? B. Instead of a compound interest savings account, you set up a savings annuity at the same rate as the compound saving account. a. How much will be in the account after five years. b. How much of this total in the account is interest? Assigned # 1. Total Amount Invested in compound interest account 3000 Annual Interest Rate # times interest is compounded Amount paid into savings annuity account every month for five years 2.3% Monthly 50 50 60 60 2. 2400 3.5% Monthly 40 40 3. 3600 4.6% Monthly 4. 1200 Caseman's Resume.docx 5. 1800 Monthly 3.1% Monthly 20 20 30 30 0 6. 4200 4.8% Monthly 70 7. 4800 2.2% Monthly 80 8. 5400 3.3% Monthly 90 9. 6000 4.4% Monthly 100 Instructions Question 2 Mortgage Monthly Payment and Total Interest Caseman's Resume.docx Use the information in the chart below on the line that corresponds to your assigned number, to answer the following questions. Be sure to show all the steps you took to reach your answers. A. What will your monthly mortgage payment be? Do not round any intermediate computations. Round your final answer to the nearest cents. B. Assuming you take the full term of the mortgage, a. how much will you have paid? b. how much total interest will you have paid? c. what percent of the total that you paid was interest? Assigned # Price of the House Mortgage Interest Rate Term of Mortgage in years 1 300,000 5.2% 2 340,000 5.4% 3 360,000 30 30 20 20 5.6% 15 4 380,000 Caseman's Resume.docx 5.8% 5 400,000 6 430,000 6.1% 30 30 20 20 15 6.3% 7 470,000 6.5% 30 8 490,000 6.7% 20 20

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