What happens to happens to the annual payment on a loan as the term of the loan increases? O It stays the same O It decreases O It increases

6. You may borrow or lend at a 5% interest rate, which you expect to remain stable forever. Make a choice and explain your answer in each scenario below. a. You may receive a gift of $500 today or a gift of $540 next year. b. You may receive gift of $100 today or a four-year loan of $500 without interest. c. You may receive a $350 rebate on an $8000 car or one year of no-interest financing on the full price of the car. d. You have just won $1 million in the lottery. You may receive $500,000 now or the full million, paid out in 20 annual payments of $50,000. e. Alternatively, you may take $500,000 now or receive $25,000 per year for eternity (a contract that your heirs will inherit).

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5 Question Let Ya,n be the present value of an n-year term continuous annuity of $1 per year for an insured aged x. Let Y be the present value of a whole life continuous annuity of $1 per year for an insured aged x. Given a constant force of interest, 8, show that: 1 бп Cov (Yz,n, Yz) = (A — e¯ðª‚„Ez (1 − Āz+n) — ±‚ñ¦Ã‚) 82 n. - -

2.One of life's great lessons is to start early and save all the money you can! If you save $10 today and $10 each and every day thereafter until you are 60 years old(suppose you're 20 years old now, save $3,650 per year), how nuch money will you accumulate if the annual interest rate is 5%?

Calculate the maturity value of a 300-day, $6,000 simple interest term deposit earning 5.15%. O a. $7,021.99 O b. $6,309.00 O c. $6,111.78 O d. $6,253.97 e. $5,756.34