Mr. and Mrs. De Dios are planning to buy a new house despite of their limited budget. They seek advice from a bank for them to produce enough amount for the down payment of the house they have chosen. According to the bank if P 20,000 will be invested at the end of each year for 5 years in an account that pays interest at 10% compounded annually the couple will be able to have the amount for down payment. If there are 3 houses for sale offering a 10% down payment of the price which among these 3 houses is the best choice? House A - P850,740 House B- P1,221,020 House C- P2,110,000 For you to be able to determine the total amount of investment for the period of 5 years, you need to complete the table below. Calculate the amount to which the first to the fourth period P 20,000.00 will grow using the compound interest formula. Period Amount in Exponential Form Amount in Pesos 1 P20,000(1.01)* P 29, 282 4 P20,000 P 20,000 Total Note: The P 20,000 deposited at the end of the first year will draw interest for 4 years, so it will amount to P20,000(1.01)* . The P20,000 deposited at the end of the second year will draw interest for 3 years so it will amount to P20,000(1.01)³, and so on. 1. What pattern will be reflected in the 2nd column of the table? Discuss.

Suppose that your parents are willing to lend you $20,000 for part of the cost of your college education and living expenses. They want you to repay them the $20,000, without any interest, in a lump sum 15 years after you graduate, when they plan to retire and move. Meanwhile, you will be busy repaying federally guaranteed loans for the first 10 years after graduation. But you realize that you won’t be able to repay the lump sum without saving up. So you decide that you will put aside money in an interest-bearing account every month for the five years before the payment is due. You feel comfortable with putting aside $275 a month (the amount of the payment on your college loans, which will be paid off after 10 years). How high an annual nominal interest rate on savings do you need to accumulate the $20,000 in 60 months, if interest is compounded monthly? Enter into a spreadsheet the values d 5 275, r 5 0.05 (annual rate), and n 5 60, and the savings formula with r replaced by r/12 (the…

David is planning to buy a new car. Since David has not save any money, he plans to take out a loan to pay for the car. He is able to finance $43,950 with a 5 year loan. The loan has a APR of 3.25% compounded monthly. Round answers to two decimal places a. What is the minimum payment amount David will need to make for his car loan? b.How much will David pay altogether over the life of his car loan?

Erica is planning on putting an addition on her home. She figures that this will cost a total of $25,800. If Erica already has $23,300 saved up, what annual interest rate compounded semiannually would Erica need to earn in order to have the required landscaping funds if she invests her money for 2.5 years?

Suppose that you need $30,000 for your last year of college. You could go to a private lending institution and apply for a signature student loan; rates range from 7% to 14%. However, your Aunt Sally is willing to loan you the money from her retirement savings, with no repayment until after graduation. All she asks is that in the meantime you pay her each month the amount of interest that she would otherwise get on her savings (since she needs that to live on), which is 4%.What is your monthly payment to her, and how much interest will you pay her over the year (9 months)?(Fill in the blanks below and give your answers as whole numbers.)The amount of interest per month you would pay Aunt Sally is $__(1)__ .The total interest you will pay her over the year (9 months)is $__(2)__ .

Mary has found a beautiful home on Richmond Rd. that she loves.The price of the home is $285,000. If Mary and George qualify for a30-year loan at a fixed interest rate of 3.99%, can they afford thehome? (Hint: Don't forget about the down payment!)

Tom and Kyra Courtney are considering buying a house and are researching the potential costs. Their adjusted gross income is $144,000. The monthly mortgage payment for the house they want would be $1,450. The annual property taxes would be $9,400, and the homeowner’s insurance premium would cost them $876 per year. What is the front end ratio and will they be able to qualify?