Calculate the arithmetic average annual return

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Reference no: EM131829199

1. A $175,000 mortgage is taken out for 15 years at 4.75% fixed interest with payments paid monthly. Create an amortization schedule for this loan.

A. What are the monthly payments?

B. How much interest is paid during each of the first five years?

C. How much interest is paid during year 14?

D. Explain why the interest payment has decreased each year.

2. Recent LCBC Company annual stock returns are shown below. Year Return (simple annual) 2012 is 4%, 2013 is 9% , 2014 is12%, 2015 is 20% 2016 is 6%

a. Calculate the arithmetic average annual return for LCBC over this period.

b. Calculate the geometric average annual return for LCBC over this period.

Reference no: EM131829199

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