Self Check Answers

Self Check Answers

  1. , rounded up
  3. $449.04
  4. $261.03
  5. $215.57 payment; $934.20 interest
  6. $21,000
  7. No. For example, if the loan is at 0%, then three- quarters of it will be paid off after three-quarters of the term.
  8. $1800 interest; $187.50 payment; 11.4% APR
  9. No
  10. 2.91% APR; 2.95% EAR
  11. $195.30
  12. One reason is that because of inflation, the value (purchasing power) of a level payment would decline over the 25 or 30 years of the term of the annuity.
  13. $947,262.41

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