1. You have a stock mutual fund in which you put $3,000 per year. How much will you accumulate in the account in 25 years if the interest rate is 10%?
What if instead you have $4,000 to deposit in the mutual fund earning 10%? If you add $2,000 to that account annually, how much will you have accumulated in 15 years? (Calculate the answer for each option. Show all work.)
2. Dick and Jane have just purchased a house and are calculating how much money they will need when the closing day rolls around. The purchase price is $200,000. They will make a 20% down payment, and they must pay two points on the loan. Closing costs should be 3% of the purchase price. What is the total dollar amount they will need at closing? (Show all work.)
3. Lindsey has a job with monthly take-home pay of $3,500. Using the suggested maximum debt safety ratio, what maximum debt burden per month can she assume? (Show all work.)
4. Joe is purchasing a new truck for $30,000. Joe is making a $2,000 down payment, and he will make 60 monthly payments of $541 each. What are the total finance costs on this loan?