1. Each answer must have all the steps that you used to arrive at that answer.
2. Your presentation was very neat and clear with one step under the one before it. All steps must be typed 

Part one 

5.

As part of your retirement planning, you purchase an annuity that pays 4.25 % annual 

interest compounded quarterly

a.

If you make quarterly payments of $700 how much will you have saved in 5 

years?

b.

instead, if you make quarterly payments of $350, how much will you have saved in 10 years?

Part two 

5.

You plan to purchase a house for $350,00 and you will make a 20% down payment. You 

are evaluating two mortgages a 30-year fixed mortgage at 2.65% and a 15-year fixed 

mortgage at 2.02 %.  Your goal is to have a monthly payment that fits within your 

budget.  

a.

Which mortgage will give you the lowest monthly payment?  What will that 

payment be?  How much less will this be than the other monthly mortgage 

payment?

b.

Assuming you take the full term of the mortgage, which mortgage will result in you 

paying the most interest ? What will the interest be ?