BUS_FP3062Assessment4.docx Time Value of Money: Annuity Cash Flow BUS-FP3062 1.Explai

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BUS_FP3062Assessment4.docx Time Value of Money: Annuity Cash Flow BUS-FP3062 1.Explain whether you would you rather have a savings account that paid interest compounded on a monthly basis or comp... ounded on an annual basis? Why? Having a savings account that is compounded monthly would be the best option. The reasoning is that the amount of money in my savings account can fluctuate throughout the year based on emergencies and vacations. Monthly compounded interest will capture those peaks in the saving better than the yearly. 2.Describe what an amortization schedule is and its uses. Explain the purpose of an amortization schedule. An amortization schedule is a repayment of a loan to show the interest being paid and the principle being paid with each payment. While all payments are exactly the same initially, the larger amount of payments goes to interest. In the second half of payments, a more considerable amount of the payments is allotted for the loan's principal. At the end of the loan, the principal payments and interest payments will be assigned different line items giving the exact amount paid to both. 3.Interest on a home mortgage is tax deductible. Explain why interest paid in the early years of a home mortgage is more helpful in reducing taxes than interest paid in later years. At the beginning of the loan, a more considerable amount of the money being paid is going to the interest and, therefore a better help in reducing taxes, and in the later years, a more significant portion is go. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .. .. . . . . . . . . . . . . . . . . . .. . . . . [Show More]

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