Invests his money after his mortgage is paid off

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Reference no: EM131836699

1. Tina and Angel both have 1500 a month to spend on housing and investing. Each of them takes out a mortgage of 200,000. Tina gets a 30-year mortgage with monthly payments at a rate of 6.5% convertible monthly. Angel gets a 20-year mortgage with monthly payments at a rate of 6.1% convertible monthly. Their first payment is due at the end of the month. Whatever leftover money from their 1500 a month, after paying their mortgage, goes to an investment in an annuity that earns an annual effective rate of 5%. How much is Tina behind Angel in her annuity at the end of 30 years? (Assume Angel still invests his money after his mortgage is paid off)

A) 60,160 B) 61,785 C) 74,250 D) 75,970 E) Tina is ahead of Angel

2. Gavin deposits 1000 into an account that earns a nominal discount rate of 5% convertible semiannually for three years and a nominal discount rate of d convertible monthly for the next four years. If the account is worth 1600 in seven years, calculate d.

A) 7.3% B) 7.5% C) 7.9% D) 8.1% E) 8.4%

Reference no: EM131836699

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