Which requires equal yearly payments

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Reference no: EM131831176

1. To buy your first home, you take out a 15 year (fully amortizing) mortgage for $375,000 which requires equal yearly payments. The effective annual interest rate is 3.6%. How much principal do you pay off in year 2?

$19,985.88

$12,805.51

None of the above

$38,277.26

$32.791.39

2. How much must you have saved if the account earns 12% annually if you plan to withdraw $5000 per year for the next 10 years when there is nothing left?

$28,251.12

$87,746.78

$87,743.68

$15,529.24

None of the above

Reference no: EM131831176

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