What are the monthly payments required to amortize this loan

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Reference no: EM131526703

1. A gallon of milk costs $3.59 today. How much will it cost you to buy a gallon of milk for your grandchildren in 35 years if inflation averages 5% per year and milk prices increase along with the overall rate of inflation?

a. $3.77

b. $6.28

c. $12.34

d. $19.80

2. You borrow $95,000 and agree to pay the interest and principal in monthly installments over the next 12 years. The annual interest rate of 12%. What are the monthly payments required to amortize this loan?

a. $1,248

b. $1,336

c. $1,400

d. $3,936

3. Compound interest can best be described as:

a. interest earned on the original principal

b. the discount rate

c. interest earned on interest only

d. interest earned on interest and interest earned on the original principal

Reference no: EM131526703

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