Finite math

MATH 113 HOMEWORK 8

Show all your work and explain how you obtained your final answer. You must turn in the homework on Tuesday, November 12 at the beginning of the class as a stapled packet.

Consider a 30-year mortgage with an interest rate of 10% compounded monthly and a monthly payment of $850.

(1) Calculate the principal. (2) How much of the principal is paid the first, 5th, 20th and last year? (3) How much interest is paid the first, 5th, 20th and last year year? (4) What is the total amount of money paid during the 30 years? (5) What is the total amount of interest paid during the 30 years? (6) What is the unpaid balance after 25 years? (7) How much has to be deposited into a savings account with an interest rate of 4% compounded

quarterly in order to pay the unpaid balance of the mortgage after 25 years? (8) How much has to be deposited each quarter year in a fund with an interest rate of 8% compounded

quarterly in order to cover the unpaid balance after 25 years?

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