1. The Montgomerys borrowed $115,000 at 7.50% for 30 years to purchase a house. Find the total interest the Montgomerys will pay if they pay the loan on schedule.
2. Why would you, as in investor, invest in bonds rather than equities today? Or alternatively, why would you, as in investor, invest in equities rather than bonds today?
3. Should employee benefits such as dental plans be included in workers’ income for tax purposes? Evaluate this question using the Haig-Simons criterion. If dental plans were treated as income, do you think this would change the composition of compensation packages offered to workers?