Bart Simpson purchased a new home for $75,000. He paid $20,000 down and agreed to pay the rest in 20 equal annual payments, which include the principal payment plus 9% compound interest, payments are made at the end of the year. What will the payments be?
2. A young boy invested $50 to plant Christmas trees on his grandfather’s farm. When the boy was a freshman in college, six years later, he harvested the trees and sold them for $400. What annual rate of return (i.e. interest rate) did he earn on the investment, assuming he incurred no expenses in the interval?
