You are considering purchasing a new home you will need to

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Reference no: EM13395644

1. An annuity pays $10 per year for 50 years. What is the future value (FV) of this annuity at the end of that 50 years given that the discount rate is 5%?
2. You are considering purchasing a new home. You will need to borrow $250,000 to purchase the home. A mortgage company offers you a 15-year fixed rate mortgage at 9% APR . If you borrow the money from this mortgage company, your monthly mortgage payment will be closest to:
3. What is the present value of an investment that will pay $400 in one year's time, and $400 every year after that, when the interest rate is 5%?

4. What is the present value (PV) of $50,000 received 20 years from now, assuming the interest rate is 4% per year?

5. An annuity is set up that will pay $1500 per year for ten years. What is the present value (PV) of this annuity given that the discount rate is 6%?

6. In order to distinguish between inflows and outflows, different colors are assigned to each of these cash flows when constructing a timeline.

7. What is the present value (PV) of $80,000 received ten years from now, assuming the interest rate is 5% per year?

8. A homeowner in a sunny climate has the opportunity to install a solar water heater in his home for a cost of $2400. After installation the solar water heater will produce a small amount of hot water every day, forever, and will require no maintenance. How much must the homeowner save on water heating costs every year if this is to be a sound investment?

Reference no: EM13395644

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