How much would the buyer have to deposit today into an account that earns 4% interest, compounded quarterly to have enough saved for the total closing costs in 5 years? | Homework Help

PART I:                        PERSONAL FINANCE:  Credit Cards                                         35 total points

1. A credit card issuer calculates interest using the average daily balance method. The monthly interest rate is 2% of the average daily balance.  The following transactions occurred during the September 1^st – September 30^th billing period:

PART II:                       PERSONAL FINANCE:  Mortgages                                            40 total points

Round all answers to the nearest dollar. 

1. The price of a home is $120,000. The bank requires a 15% down payment.  The buyer is                offered                two mortgage options:

• Option A: 30-year fixed at 7% with closing costs of $2,000 and one point
• Option B: 30-year fixed at 6.5% with closing costs of $1,500 and two points

Which mortgage loan has the greater total costs (closing costs + the amount paid for points + total cost of interest)? By how much?

Answer:               Option A [      ]                      Option B [     ]

                                Difference in total costs:   $_______________________

1. Using the financial industry’s rule of thumb for monthly mortgage limits set at 28% of gross monthly income – how much would the buyer have to earn yearly to be able to afford the option chosen in Part I?

                                                                                                Answer:               $______________________________

1. How much would the buyer have to deposit today into an account that earns 4% interest, compounded quarterly to have enough saved for the total closing costs in 5 years?

Answer                                $______________________________

PART III:          STATISTICS                                                                                          25 total points

7. Teenage Drug Use

1. Make a scatter plot for the given data.

1. State the correlation between the two variables: ¨  Pos    ¨  Neg   ¨ No Correlation

1. Determine the correlation coefficient, rounded to two decimal places, between the percentage of people in a country who are literate and the percentage who are undernourished.

Answer:   _________________

1. Find the equation of the regression line for the percentage of teenagers who have used marijuana and the percentage who have used other drugs. Round m and b to two decimal places.

y = mx + b                                                                          Answer:    _________________

1. What percentage of teenagers, to the nearest percent, can we anticipate using illegal drugs other than marijuana in a country where 10% of teenagers have used marijuana?

Answer:    __________________

PART IV:          EXTRA CREDIT                                                                                    20 total points

EC1:     How much more would you earn in the first investment than in the second investment?  Please round answers to the nearest dollar.

$50,000 invested for 30 years at 10% compounded annually       Amt. earned: $______________

$50,000 invested for 30 years at   5% compounded monthly       Amt. earned: $______________

How much more will be earned in the first investment?                Difference:    $______________

EC2      How much money should be deposited today in an account that earns 9.5% compounded monthly so that it will accumulate to $10,000 in three years?

Amt. deposited: $___________

EC3:     License plates in a particular state display 4 letters followed by 2 numbers.  How many different license plates can be manufactured for this state?

Answer:  _________________________

EC4:     A group consists of four men and five women.  Three people are selected to attend a conference. How many ways can three people be selected from this group of nine?

Answer:  _________________________