The cost of an annuity with monthly payments

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Reference no: EM13963586

1. What would be the cost of an annuity with monthly payments of $350, made over a period of five years, with 4% interest compounded monthly?

2. In January 2008, a dealership in Northern Illinois was offering a new 2008 Corolla CE car for $14,462, about 10.5% lower than the list price. One option for financing was 2.9% over 36 months. What was the monthly payment?

3. Suppose a man retires at age 65 and needs $2000 per month in income. Based on an expected lifetime of 16.6 more years (for an average man), how much would he have to invest in a life-income annuity earning 5% to pay that much per year?

4.For the following problem, we will calculate the equity earned in the first 5 years of payments. Suppose that you can get a 30-year mortgage for $100,000 at 7.5%, what would your monthly payments be?__________ (Round to the nearest cent.) Determine how much of the mortgage loan would have been paid off by the remaining payments. _____________ (Round to the nearest dollar.) Determine the equity. $____________ (Round to the nearest dollar.)

Reference no: EM13963586

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