1. A person will buy a $250,000 home paying 20% down and financing the rest at the annual interest rate of 7% compounded monthly. He will make monthly payments for 30 years to pay off the loan.

a) Find the monthly payment.

b) How much of the first payment is interest?

c) How much is still owed after 10 years? There are 2 ways to do this in the tvm- solver.

d) How much of the 121^st payment is interest?

e) If he refinances after 10 years at annual interest rate 6% compounded monthly, what is his new payment, assuming the loan is paid off in the remaining 20 years.

2. a) How much should you deposit in the bank at annual interest rate 4% compounded monthly to be able to withdraw $750 per month for 10 years?

b) If no withdrawals will be made until 20 years from now, how much would you need to deposit today?

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