QUESTION 25: | |
Amount of finance required = 298000*(1-20%) = | $ 2,38,400 |
Monthly installments (using the loan amortization formula) = 238400*0.004*1.004^360/(1.004^360-1) = | $ 1,250.80 |
Balance outstanding at the end of 10 years = PV of the remaining 240 installments = 1250.80*(1.004^240-1)/(0.004*1.004^240) = | $ 1,92,739.90 |
Amount left from the money received from the trust after paying off the balance of the loan = 219500-192739.90 = | $ 26,760.10 |
QUESTION 26: | |
The amount to be accumulated in the fund at EOY 15 = 9800*(1.04^30-1)/(0.04*1.04^30) = | $ 1,69,461.93 |
Amount to be endowed today = 169461.93/1.04^15 = | $ 94,096.19 |
5) Investment E pays $250 at the beginning of every year for the next 10 years...
Question 24 (3 points) Which of the following investments would have the lowest present value? Assume that the effective annual rate for all investments is the same and is greater than zero. 1) Investment A pays $250 at the end of every year for the next 10 years (a total of 10 payments). 2) Investment B pays $125 at the end of every 6-month period for the next 10 years (a total of 20 payments). 3) Investment C pays $125...
Answer Question 26 (3 points) A grandfather tells his grandson that he has created a trust fund for him. The terms of the trust are as follows: $9,800 per year for 30 years. The money will be invested in an account that pays 4% annual interest. The payments will start 15 years from today. How much money does the grandfather need to endow the trust with today to fund all the payments? Format $12,345 as 12345 Your Answer: Answer Question...
Question 18 (3 points) A couple decides to purchase a beach condominium in Hilton Head Island, South Carolina. The agreed purchase price will be $290,000. The couple will pay 20% down on the condo and finance the remaining balance with a 30-year mortgage. The terms of the mortgage are 4.80% APR (with monthly compounding. What is the monthly payment for the mortgage? Format $1,234.45 as $1234.45 Your Answer: Answer Question 19 (3 points) Janice has $5,000 invested in a bank...
10) An investment will pay you S120 in one year and $200 in two years. If the interest rate is 7%, what is the present value of these cash flows? A) S294.69 B) $286.84 C) $299.07 D) $320.00 11. A bank is negotiating a loan. The loan can either be paid off as a lump sum of $120.000 at the end of five years, or as equal annual payments at the end of each of the next five years. If...
10) An investment will pay you 51 20 in one year and $200 in two years. If the interest rate is 7%, what is the present value of these cash flows? A) $294.69 B) $286.84 C) $299.07 D) $320.00 10) 11). TU) A bank is negotiating a loan. The loan can either be paid off as a lump sum of $120,000 at the end of five years, or as equal annual payments at the end of each of the next...
1. You will receive $100 per year for 10 years. The discount rate is 10%. What is the present value of this stream? 2. Using the previous information, assume now the 100 will increase at a 5% per year from year 1. What is the new present value? 3. Now assume compute the present value for the same information using a perpetuity without and with growth. Compare the 4 present values. What would you rank those? 4. You look at...
please answer all in full 1. On your 1st birthday, you received a $10 savings account earning 6% annually. How much will you have in the account on your 30th birthday if you don't withdraw any money before then? 2. Your partner just promised to you that he/she will give you a graduation gift by paying half of of a new car when you receive an MBA degree in 2 years. Suppose that you also have $9,000 to invest today...