Exercise #3 Due Feb 17
- Suppose that you wish to buy a car for $16,500. You make a downpayment of $1,000. If your bank will finance the rest at 7.5% interest per year, compounded montly, for 3 years, what will be your montly payment? How much total will you pay for the car? How much of that will be interest?
- Suppose that you plan to save $150 each month (over a 10 year period) in an account that pays 6% interest per year, compounded monthly? How much will you have in your account at the end of your 10 year savings period? Suppose that six years into your savings plan, there is a recession in the economy and your bank decides that they can at that point only offer 4% interest per year, compounded annually. How much will you have in your account at the end of your 10 year savings period?
- Consider the data from New York City (annual water usage) in the worksheet modelling.xls. Assume that a linear model can be used to best fit the gathered data. Predict the annual water usage for 1985? for 2005? for 2025?