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# Mortgage, Annuity and Return

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1. A \$20,000 mortgage is to be paid by 180 equal monthly payments, each including some principal along with interest on the outstanding principal, at an effective rate of 3 1/2 per half year. What are the monthly payments?

2. An investor wants to purchase an annuity which will yield an income of \$2000 at the end of each year for 7 years. If money is worth 12%, What is the maximum price he should pay for this annuity?

3. An investment today of \$25,000 is expected to pay out \$5000 a year for the next 10 years. What is the rate of return on this investment?

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1. A \$20,000 mortgage is to be paid by 180 equal monthly payments, each including some pricipal along with interest on the outstanding principal, at an effective rate of 3 1/2 per half year. What are the monthly ...

#### Solution Summary

This response calculates the finances surrounding different types of investments. Mortgage, annuity and returns for equal monthly payments are determined.

\$2.19