- You have taken out a loan for $10,000 at 10% interest compounded annually. At the end of each year, you make a payment. Draw an amortization schedule and use it to figure out the total amount paid back, given that your annual payment amount is:
- $3,000
- $2,000
- $1,000
Duplicate this chart and graph four times. Fill in each chart using the information given below. Then show the growth of each investment on the graphs. Each graph should use 3 colors (one for each interest rate) and a key which shows what each color represents.
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5 years |
10 years |
15 years |
| 5% |
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| 10% |
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| 15% |
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- You invest $1000 earning simple interest.
- You invest $1000 earning interest compounded annually.
- You invest $1000 earning interest compounded monthly.
- You have no initial savings but you will be putting $100 every month into an investment earning interest compounded monthly.
You take out a home loan at 8% interest. Use the monthly mortgage payment chart to answer the following questions.
- What would your mortgage payment be if your loan is $120,000 to be paid over 30 years? What is the total amount you are paying back over those 30 years?
- If your loan amount is $170,000 and your monthly mortgage payments are $1,500, how long will it take to pay off the loan?
You would like to take out a $200,000 home loan. A certain lender is offering you two options:
Option A: 6½% interest at 2¼ points
Option B: 7½% interest at - ½ points
Under what circumstances is Option A better than Option B? Under what circumstances is Option B better than Option A?
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