Mortgage-annuity and rate of return

Reference no: EM1329827

1. A $20,000 mortgage is to be paid by 180 equal monthly payments, each including some principal along with interest on the outstanding principal, at an effective rate of 3 1/2 per half year. What are the monthly payments?

2. An investor wants to purchase an annuity which will yield an income of $2000 at the end of each year for 7 years. If money is worth 12%, What is the maximum price he should pay for this annuity?

3. An investment today of $25,000 is expected to pay out $5000 a year for the next 10 years. What is the rate of return on this investment?

Reference no: EM1329827

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