### Question Description

__Compound Interest__

Bob bought hunting equipment for $4,800. He borrowed money from his credit union for the purchase, obtaining a loan with a 10% annual interest rate, monthly compounding, and a 3-year term. If Bob’s loan is structured as an installment loan, calculate his total installment cost, his monthly payment, and his total finance charge (interest).

__Annuity Payment__

David is saving money to open an Indian food franchise. He needs $15,000 in two years to make his down payment and is investing in an annuity yielding an annual interest rate of 7% compounded monthly. If the annuity requires that David make monthly investments, what annuity payment must David make to save $15,000?

- Mortgage Financing

Abbie purchased a $129,000 home with 30-year term, 6% rate mortgage. At closing she paid a $10,000 down payment, requiring her to purchase private mortgage insurance (PMI) at a cost of $25 per month. Calculate Samantha’s monthly mortgage plus PMI payment.

## Final Answer

Please, see the attached for the solution.Please, give me feedback.

Question: Compound Interest

Bob bought hunting equipment for $4,800. He borrowed money from his credit union for the

purchase, obtaining a loan with a 10% annual interest rate, monthly compounding, and a 3-year

term. If Bob’s loan is structured as an installment loan, calculate his total installment cost, his

monthly payment, and his total finance charge (interest)

Solution

Given:

Loan Amount (PV) = $4,800

Annual Interest Rate per period (r) =

Number of years = 3 years

10% 0.1

=

= 0.008333

12

12

Compounding...

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