Question 86995
Problem #8
Which of the following investments is larger after 19 years?

  (a)  $7500 is deposited annually and earns 4.5% interest compounded annually.
  (b)  $600 is deposited monthly and earns 4.5% interest compounded monthly.
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Compare their growth using  compound interest formula and the the Future Value formula:
Compound Interest: FV = (principal)(1+r/n)^(nt)
FV = 7500(1+0.045/1)^(1*19)
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Future Value: FV = (periodic payment)[(1+i)^n -1]/i
where periodic payment = $600; n=12*19 ; i=0.045/12
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Problem #9
	Find monthly payment.

In order to purchase a home, a family borrows $26000 at 10.8 % for 15 yr. What is their monthly payment? Round the answer to the nearest cent.
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Use this annuity formla:
balance = (loan amt)(1+i)^n - [P/i][(1+i)^n - 1]
You want the balance to be zero; 
loan amt=26000
i=0.108/12
n=12*15
Solve for P=monthly payment.
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I get $292.26
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Cheers,
Stan H.