3Ŧ1 Lxerclse Þage 269ŴŴŴŴŴŴŴŴŴŴ4ţ 6 and 42

4Ŧ llnd Lhe accumulaLed amounL aL Lhe end of 8 mo on a $1200 bank deposlL paylng slmple
lnLeresL aL a raLe of 7Ʒ/yearŦ

6Ŧ A bank deposlL paylng slmple lnLeresL aL Lhe raLe of 3Ʒ/year grew Lo a sum of $3100 ln 10 moŦ
flnd Lhe prlnclpalŦ

42Ŧ 8eLlremenL lundsť llve and a half years agoţ Chrls lnvesLed $10ţ000 ln a reLlremenL fund LhaL
grew aL Lhe raLe of 10Ŧ82Ʒ/year compounded quarLerlyŦ WhaL ls hls accounL worLh Loday?

3Ŧ2 Lxerclse Þage 284ŴŴŴŴŴŴŴŴŴŴ16 and 28
16Ŧ Savlngs AccounLsť lf !ackson deposlLs $100 aL Lhe end of Lhe monLh ln a savlngs accounL earnlng
lnLeresL aL Lhe raLe of 8Ʒ/year compounded monLhlyţ how much wlll he have on a deposlL ln hls
savlngs accounL aL Lhe end of 6 yrţ assumlng LhaL he makes no wlLhdrawals durlng LhaL perlod?

27Ŧ Þurchaslng A Pomeť 1he !ohnsons have accumulaLed a nesL egg of $40ţ000 LhaL Lhey lnLend Lo
use as a down paymenL Loward Lhe purchase of a new houseŦ 8ecause Lhelr presenL gross
lncome has placed Lhem ln a relaLlvely hlgh Lax brackeLţ Lhey have declded Lo lnvesL a mlnlmum
of $2400/monLh ln monLhly paymenLs (Lo Lake advanLage of Lhe Lax deducLlon) Loward Lhe
purchase of Lhelr houseŦ Poweverţ because of oLher flnanclal obllgaLlonsţ Lhelr monLhly
paymenLs should noL exceed $3000Ŧ lf local morLgage raLes are 7Ŧ3Ʒ/year compounded monLhly
for a convenLlonal 30 year morLgageţ whaL ls Lhe prlce range of Lhe houses LhaL Lhey should
conslder?

28Ŧ Þurchaslng A Pomeť 8efer Lo Lxerclse 27Ŧ lf local morLgage raLes were Lo lncrease Lo 8Ʒţ how
would Lhls affecL Lhe prlce range of houses LhaL Lhe !ohnsons should conslder?

3Ŧ3 Lxerclse Þage 293ŴŴŴŴŴŴŴŴŴŴ 6ţ 20ţ 30 and 46
ln Lxerclses 1Ŵ8ţ flnd Lhe perlodlc paymenL requlred Lo amorLlze a loan of 9 dollars over yr
wlLh lnLeresL charged aL Lhe raLe of Ʒ/year compounded ¯ Llmes a yearŦ
6Ŧ 9 ƹ 80ţ000ţ ƹ 10Ŧ3ţ ƹ 13ţ ¯ ƹ 12
20Ŧ Loan AmorLlzaLlonť WhaL monLhly paymenL ls requlred Lo amorLlze a loan of $30ţ000 over 10
years lf lnLeresL aL Lhe raLe of 12Ʒ/year ls charged on Lhe unpald balance and lnLeresL
calculaLlons are made aL Lhe end of each monLh?

30Ŧ Slnklng lundsť 1he managemenL of ClbralLar 8rokerage Servlces anLlclpaLes a caplLal
expendlLure of $20ţ000 ln 3 years for Lhe purchase of new compuLers and has declded Lo seLup
a slnklng fund Lo flnance Lhls purchaseŦ lf Lhe fund earns lnLeresL aL Lhe raLe of 10Ʒ/year
compounded quarLerlyţ deLermlne Lhe slze of each (equal) quarLerly lnsLallmenL LhaL should be
deposlLed ln Lhe fundŦ

46Ŧ llnanclng a Pomeť llnanclng a Pome Sarah secured a bank loan of $200ţ000 for purchaslng a
houseŦ 1he morLgage ls Lo be amorLlzed Lhrough monLhly paymenLs for a Lerm of 13 yearsţ wlLh
an lnLeresL raLe of 6Ʒ/year compounded monLhly on Lhe unpald balanceŦ she plans Lo sell her
house ln 3 yearsŦ Pow much wlll Sarah sLlll owe on her houseƽ

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