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Chapter 8: Problem 12
In Exercises 11-20, express each decimal as a percent. \(0.96\)
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Make Sense? In Exercises 23-26, determine whether each statement makes sense or does not make sense, and explain your reasoning. There must be an error in the loan amortization schedule for my mortgage because the annual interest rate is only \(3.5 \%\), yet the schedule shows that I'm paying more on interest than on the principal for many of my payments.
Suppose that you drive 15,000 miles per year and gas averages \(\$ 3.50\) per gallon. a. What will you save in annual fuel expenses by owning a hybrid car averaging 60 miles per gallon rather than an SUV averaging 15 miles per gallon? b. If you deposit your monthly fuel savings at the end of each month into an annuity that pays \(5.7 \%\) compounded monthly, how much will you have saved at the end of six years?
In Exercises 11-18, a. Determine the periodic deposit. Round up to the nearest dollar. b. How much of the financial goal comes from deposits and how much comes from interest?$$ \begin{array}{|l|l|l|l|} \hline \$ ? \text { at the end of each month } & 4.5 \% \text { compounded monthly } & 10 \text { years } & \$ 200,000 \\ \hline \end{array} $$
In Exercises 1-10, use $$ P M T=\frac{P\left(\frac{r}{n}\right)}{\left[1-\left(1+\frac{r}{n}\right)^{-n t}\right]} $$ Round answers to the nearest dollar. Suppose that you decide to borrow \(\$ 40,000\) for a new car. You can select one of the following loans, each requiring regular monthly payments: Installment Loan A: three-year loan at \(6.1 \%\) Installment Loan B: five-year loan at \(7.2 \%\). a. Find the monthly payments and the total interest for \(\operatorname{Loan} A\). b. Find the monthly payments and the total interest for Loan B. c. Compare the monthly payments and the total interest for the two loans.
In Exercises 1-10, a. Find the value of each annuity. Round to the nearest dollar b. Find the interest.$$ \begin{array}{|l|l|l|} \hline \begin{array}{l} \$ 50 \text { at the end of } \\ \text { each month } \end{array} & \begin{array}{l} 6 \% \text { compounded } \\ \text { monthly } \end{array} & 30 \text { years } \\ \hline \end{array} $$
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