Problem 1 You deposit $5000 in a savings account that earns 10% simple interest per year and withdraw all your money at the end of the fifth year. But instead, if you deposit the $5000 in another savings account that earns 8% interest, compounded yearly and withdraw all your money at the end of the fifth year, how much more (or less) money would you have?

Problem 2: You are about to borrow $3000 from a bank at a monthly interest rate of 9%. You are required to make three repayments to pay off the debt with the first repayment occurring at the end of month 1. Find how much you need to pay every month and show the interest payment and principal payment for each month.

Problem 5: A man borrowed $1000 from a bank at 10% interest Problem 5: A man borrowed $1000 from a bank at 10% interest. He agreed to repay the loan in 3 end-of-year payments. At the end of the first year, he will repay 20% of the $1000 principal plus half of the interest that is due for the first year. At the end of the second year, he will repay 40% of the total debt he owed to the bank at the beginning of the second year plus half of the interest that is due for the second year. At the end of the third year, he will repay all his remaining debt. Compute and draw the borrower’s cash flow.

Problem 6: A man borrows a loan from a bank to repay in 10 years Problem 6: A man borrows a loan from a bank to repay in 10 years. The bank offers three alternatives for the repayment of the loan: a) The man pays nothing for 3 years and pays an equal amount of $1000 thereafter until the end of year 10. b) The man pays $500 at the end of the second year and increases his payments by $100 every year until the end of year 10. c) The man pays $500 at the end of the third year and increases his payments by %15 every year until the end of year 10. Find the present worth of each alternative assuming that the bank charges 10% interest per year.

Problem 7: Find the equivalance relationship under the interest rate i, between a single payment P at year 0 and a series of payments that starts at year 2 and continues until year N with a payment amount of (k-1)G(1+g)(k-1) at the end of each year k=2….N. If i≠g If i=g

Linear Gradient Series 0 1 2 3 N F A Equal Payment Series Linear Gradient Series Geometric Gradient Series