Question

you are buying a home for 200,000 with no down payment what will be your monthly payment on a 30 year fixed mortgage at 6%?

how much must be invested today in order to generate a six-year annuity of $2,000 per year with first payment one year from today, at an interest rate of 10%

Answer 1

Ans 1) $ 1199.10

P =	Regular Payments
PV =	Loan Amount
r =	rate of interest
n =	no of periods
P =	r (PV)
	1 - (1 + r )^-n
P =	(6%/12)*200000
	1 - (1 / (1 + 6%/12)^360))
P =	1000
	0.833958072
P =	1199.10

Ans 2) $ 8710.52

Annuity PV Factor (End of Period) =	P [ 1 - ( 1 + r )^-n ]
	r
	2000* ( 1 - ((1 / (1 + 10%)^6)))
	10%
	871.0521399
	0.1
	8710.52