1. You are to make monthly deposits of $800 into a retirement account that pays an APR of 9.8 percent compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 31 years?
2. You have just arranged for a $1,700,000 mortgage to finance the purchase of a large tract of land. The mortgage has an APR of 7 percent, and it calls for monthly payments over the next 22 years. However, the loan has an eight-year balloon payment, meaning that the loan must be paid off then.
How big will the balloon payment be?