Harry morgan plans to make 30 quarterly deposits of $200 into a savings account. the first deposit will be made immediately. the savings account pays interest at an annual rate of 8%, compounded quarterly. how much will harry have accumulated in the savings account at the end of the seven and a half-year period? (fv of $1, pv of $1, fva of $1, pva of $1, fvad of $1 and pvad of $1) (use appropriate factor(s) from the tables provided.)

Amount in savings account after 7 and a half years is $8,113.62

Explanation:

Given:

Quarterly payments made in savings account (pmt) = $200

Annual interest rate = 8%

Quarter interest rate (rate) = 8÷4 = 2%

Compounding period (nper) = 7 and a half years or 7.5×4 = 30 quarterly payments

This is an annuity as uniform amount of $200 is deposited every quarter.

Savings at the end of seven and a half years mean future value of annuity.

Future value of annuity can be computed using spreadsheet function =FV(rate, nper,pmt,PV)

Savings account will have $8113.62 at the end of seven and a half years.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711. 

consumer credit. an advantage is that it allows consumers to afford expensive goods and services now, increasing their standard of living. however, a disadvantage is that it creates a trap for debt, if people do not have self control, they may see themselves filing personal bankruptcy.