1 The house price is $475,000. The mortgage term is 15 years. Calculate your monthly payment if you get a mortgage with a 20% down payment at a 15-year fixed annual rate of 5%. Assume no compounding during the year. 2 Suppose you invest $3,845 at 7% simple annual rate (APR) for 5 years. a) Calculate the future value if interest is paid every quarter. b) Calculate the effective yearly interest rate in question a).

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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1
The house price is $475,000. The mortgage term is 15 years. Calculate your monthly payment if you get
a mortgage with a 20% down payment at a 15-year fixed annual rate of 5%. Assume no compounding
during the year.
2
Suppose you invest $3,845 at 7% simple annual rate (APR) for 5 years.
a) Calculate the future value if interest is paid every quarter.
b) Calculate the effective yearly interest rate in question a).
Transcribed Image Text:1 The house price is $475,000. The mortgage term is 15 years. Calculate your monthly payment if you get a mortgage with a 20% down payment at a 15-year fixed annual rate of 5%. Assume no compounding during the year. 2 Suppose you invest $3,845 at 7% simple annual rate (APR) for 5 years. a) Calculate the future value if interest is paid every quarter. b) Calculate the effective yearly interest rate in question a).
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