1. Miss Crystal Palace just purchased - you guessed it - a crystal palace for $650,000. She makes a 25% down payment and finances the balance with a mortgage at an interest rate of 5.6% for 15 years, making monthly payments.
a. What amount will she borrow?
b. Complete the amortization table for the first three payments. Show all work?
2. Meagan invests $1,200 each year in an IRA for 12 years in an account that earned 5% compounded annually. At the end of 12 years, she stopped making payments to the account, but continued to invest her accumulated amount at 5% compounded annually for the next 11 years.
a. What was the value of the Ira at the end of 12 years?
b. What was the value of the investment at the end of the next 11 years?
c. How much interest did she earn?