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1. A gallon of milk costs $3.59 today. How much will it cost you to buy a gallon of milk for your grandchildren in 35 years if inflation averages 5% per year and milk prices increase along with the overall rate of inflation?

2. You borrow $95,000 and agree to pay the interest and principal in monthly installments over the next 12 years. The annual interest rate of 12%. What are the monthly payments required to amortize this loan?

3. Compound interest can best be described as:

a. interest earned on the original principal

b. the discount rate

c. interest earned on interest only

d. interest earned on interest and interest earned on the original principal

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92751592

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