As an investor, if you had a choice of daily, monthly, or quarterly compounding, which would you choose? Why? How are the present values affected by changes in interest rates? The interest on your hom...
As an investor, if you had a choice of daily, monthly, or quarterly compounding, which would you choose? Why?
How are the present values affected by changes in interest rates?
The interest on your home mortgage is tax deductible. Why are the early years of the mortgage more helpful in reducing taxes than in the later years?
Homework Answers
1)
As an investor i will choose daily compounding. As the compounding frequency increases, higher will be the future value. Since daily compounding has the highest number of compounding frequency, i.e., 365 days, it will have the highest future value. This is because interest gets added on interest. Interest on interest will be added 365 days which will result in a greater return.
2)
There is an inverse relationship between present value and interest rates. When interest rates increase, present value decrease. When interest rate decrease, present value increase.
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As an investor, if you had a choice of daily, monthly, or quarterly compounding, which would you choose? Why? How are the present values affected by changes in interest rates? The interest on your hom...
Long questions Throughout this question, assume annual interest rate is 3.6% with monthly compounding. You are...
Long questions Throughout this question, assume annual interest rate is 3.6% with monthly compounding. You are a loan officer in the mortgage department of a local bank. A customer, who is also a Stevens alum, walks in and applies for a $750,000 loan to buy a starter home in Hoboken. The standard terms your bank have been offering to previous customers are as followed, • Contract A: a 15-year fixed rate loan, with an annual rate of 3.6% and with...
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*. Il you invest $50,000 to earn 8% interest, which of the following compounding approaches would...
*. Il you invest $50,000 to earn 8% interest, which of the following compounding approaches would return the highest amount after one year? a. Annually b. Quarterly c. Monthly d. Daily 5. Assume ABC Company deposits $20,000 with First National Bank in an account earning interest at 8% per annum, compounded quarterly. How much will ABC have in the account after 3 years? (Use the factor tables provided at the end. Round answers to the nearest whole dollar) a. $25,194...
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0. Read examples 6 and 7 in the text 1. Write an instruction describing amortization tables in your words. Tell what information in the columns, how the information in the three main column is calcul...
0. Read examples 6 and 7 in the text
1. Write an instruction describing amortization tables in your
words. Tell what information in the columns, how the information in
the three main column is calculated, and why it is useful, Do not
use specific numbers, mathematical symbols, or excel functions, or
cell references, Be sure to explain the calculations for the three
columns.
2. Find the median home price for a city where you would like to
live. Tell how...
I need help with question 7.50. I looked at the solution for this one but I...
I need help with question 7.50. I looked at the solution for
this one but I don't know if the solution is right or wrong because
so many people did not find the solution helpful
205 Exercises for Spreadsheets $10,000 and a coupon rate of 85 per year. payable semiannually? .45 7.46 If you receive a 55000 bond as a graduation present and the bond will pay you $75 interest every 3 months for 20 years, what is the bond...
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please answer all in full 1. On your 1st birthday, you received a $10 savings account...
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Long questions Throughout this question, assume annual interest rate is 3.6% with monthly compounding. You are a loan officer in the mortgage department of a local bank. A customer, who is also a Stevens alum, walks in and applies for a $750,000 loan to buy a starter home in Hoboken. The standard terms your bank have been offering to previous customers are as followed, • Contract A: a 15-year fixed rate loan, with an annual rate of 3.6% and with...
*. Il you invest $50,000 to earn 8% interest, which of the following compounding approaches would return the highest amount after one year? a. Annually b. Quarterly c. Monthly d. Daily 5. Assume ABC Company deposits $20,000 with First National Bank in an account earning interest at 8% per annum, compounded quarterly. How much will ABC have in the account after 3 years? (Use the factor tables provided at the end. Round answers to the nearest whole dollar) a. $25,194...
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0. Read examples 6 and 7 in the text
1. Write an instruction describing amortization tables in your
words. Tell what information in the columns, how the information in
the three main column is calculated, and why it is useful, Do not
use specific numbers, mathematical symbols, or excel functions, or
cell references, Be sure to explain the calculations for the three
columns.
2. Find the median home price for a city where you would like to
live. Tell how...
I need help with question 7.50. I looked at the solution for
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so many people did not find the solution helpful
205 Exercises for Spreadsheets $10,000 and a coupon rate of 85 per year. payable semiannually? .45 7.46 If you receive a 55000 bond as a graduation present and the bond will pay you $75 interest every 3 months for 20 years, what is the bond...
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