1. Mary wants to take out a loan. She can afford to make monthly
payments of 500 dollars and wants to pay the loan off after exactly
25 years.
What is the maximum amount that Mary can afford to borrow if the
bank charges interest at an annual rate of 6 percent, compounded
monthly? (Give your answer, in dollars, correct to the nearest
dollar.)
Amount she can borrow: $
2. James borrows 75000 dollars from a bank that charges
interest at an annual rate of 6 percent, compounded monthly.
Calculate the monthly payment that James would have to make in
order for the loan to be paid off after exactly 30 years.
Monthly payment: