1. Would you rather have a savings account that paid interest compounded on a monthly basis, or one that compounded interest on an annual basis? Why?
2. What is an amortization schedule, and what are some of its uses?
3. "The interest on your home mortgage is tax deductible. Why are the early years of the mortgage more helpful in reducing taxes than in the later years" (Cornett, Adair, & Nofsinger, 2014, p. 118)?
4. What is the difference between an ordinary annuity and an annuity due?
5. "What is the future value of a $500 annuity payment over five years if interest rates are 9 percent" (Cornett, Adair, & Nofsinger, 2014)?
o Recalculate the future value at 8 percent interest, and again, at 10 percent interest.
6. "What is the present value of a $700 annuity payment over four years if interest rates are 10 percent" (Cornett, Adair, & Nofsinger, 2014)?
o Recalculate the present value at 9 percent interest, and again, at 11 percent interest.