Could someone help me with some word problems?
What portion of a familys total income is considered to determine the amount they can afford for monthly mortgage payments?
Ping, a 19-year-old college student, just asked his mother if he could borrow $ 2,000 because he spent the rest of this semester’s loan money for the semester on a trip to Hawaii for spring break. His mother thinks he’s being very irresponsible with his money, so she says yes on one condition: she will charge him a simple interest rate of 10% annually. If he doesn’t pay his mother back until he graduates in two and a half years, how much interest will he owe her?
a. $ 250
b. $ 400
c. $ 500
d. None of these
If I put $ 2,000 in a Certificate of Deposit today, and the interest rate is 5% annually compounded quarterly, what will it be worth in two years?
a. $ 2208.97
b. $ 2100.53
c. $ 2200.00
d. $ 2050.25