1) Compute the present value of a one-time payment of $1,000 paid in four years using the following discount rates: 2.0% in year 1, 2.25% in year 2, 4% in year 3, and 4.5% in year 4. Present Value: $
2) You purchase a house for $300,000 by getting a mortgage for $240,000 and paying a $60,000 down payment (20%). You can get a 15-year mortgage with a 3.6% interest rate.
A. What would be your monthly payment?
B. What would be the loan balance be in 10 years?
3) If the present value of an ordinary, 15 year annuity is $30,000 and interest rates are 5%, what is the present value of an annuity due with the same length of life, present values and interest rate? Present Value: