Chapter 8 & 9 Q&A

A3) Finance Assume you have a Personal Automobile Policy with 50/100/10 split limits. You are responsible for an accident which causes property damage to a sidewalk cafe and injures four persons. The injured people successfully sue you for $5,000, $10,000, $30,000 and $80,000 and the café owner successfully sue you for $5,000. Your insurance company will pay: a. $65,000 b. $67,500 c. $127,500 d. $130,000 e. None of the above

5. Mr. Johnson wants to buy insurance against his house burning down. The insurance will pay Mr. Johnson $500,000 if his house burns down. The probability that Mr. Johnson's house will burn down in a given year is 0.005, so the probability that it will not burn down is 0.995. The insurance premium for the policy is $2,000 per year. (a) Determine the expected return for the insurance company. (b) Because the insurance company is losing money on house insurance, a company officer asks the premium manager to determine the annual premium required for the insurance company to make $1,000 on each $500,000 policy. Determine the annual premium.

A young couple has saved up $12,000.00 for a down payment on a home. They are currently paying $1700.00 per month to rent a condo. The couple is pre-approved for a 20-year mortgage at 7.9% and their realtor estimates that they will need to set aside $3500.00 for taxes and other costs at the time of sale. Part: 0/4 Part 1 of 4 (a) What is the price of the most expensive home they can buy without raising their monthly housing payment? The maximum price of a home the couple can afford is $. X 3 Espanol M

An acquaintance asks Kara to borrow money today to help her repair her car. The person will be able to repay Kara $500 in one year, and Kara is fully expects she will be repaid on time (risk free).  If Kara requires a 5.0% return, what (largest) amount should she lend to her acquaintance?$525.00$495.00$475.00$476.19$471.43

A borrower purchased a $250,000 house with 5 percent down payment taking a mortgage loan for the rest of the amount. Private mortgage insurance covers 6 percent of the loan. Suppose the borrower defaults after the loan has been paid down to $223,000. Suppose further the lender is able to sell the foreclosed house for $211,000. What compensation from the mortgage insurer does the lender get?

A retired couple buys a new recreational vehicle (RV) for $42,000.00. They make a down payment of $13,000.00 and finance the balance at 9.0% APR over 60 months. Their monthly payment is $601.99. Instead of making the 12th payment, the couple decides to pay the remaining balance on the loan. Use the actuarial method to determine how much interest the couple will save. If you use the Finance Charge Table 11.2, page 632, and the "unearned interest formula", page 635, in your textbook to solve this problem, the result will match exactly with one of the answers. If you use a spreadsheet to do the computation, your result will not match exactly with any of the answers, but it will differ only very little (mostly less than $1) from the "correct" answer. O $4,650.28 O $4,705.06 $5,620.19 $6,814.22

Please solve i will upvote you

Dev

The Potters want to buy a small cottage costing $119,000 with annual insurance and taxes of $760 and $2900, respectively. They have saved $11,000 for a down payment, and they can get a 6%, 10-year mortgage from a bank They are qualified for a home loan as long as the total monthly payment does not exceed $1000. Are they qualified? What is the total monthly payment?

11. Can I afford this home? - Part 1 Can Valerie and Shen afford this home using the monthly income loan criterion? Next week, your friends Valerie and Shen want to apply to the Tenth National Bank for a mortgage loan. They are considering the purchase of a home that is expected to cost $155,000. Given your knowledge of personal finance, they've asked for your help in completing the Home Affordability Worksheet that follows. To assist in the preparation of the worksheet, Valerie and Shen also collected the following information: • Their financial records report a combined gross before-tax annual income of $85,000 and current (premortgage) installment loan, credit card, and car loan debt of $1,240 per month. • Their property taxes and homeowner's insurance policy are expected to cost $3,488 per year. • Their best estimate of the interest rate on their mortgage is 7.5%, and they are interested in obtaining a 15-year loan. They have accumulated savings of $38,500 that can be used to…

Bha

Please help me to solve this problem

Review the following scenario. Identify how much each lienholder would receive. Mrs. Smith takes out a $450,000 mortgage loan to construct her home. Unfortunately she loses her job and defaults on her payments, leading the lender to foreclose on her house. The lender only receives $375,000 at the foreclosure option. (Enter answers using exactly this format "$x,xxx.xx") $350,000 filed by mortgage lender in 2016 $20,000 filed by Court for lawsuit in 2012 $15,000 filed in 2018 for property taxes $10,000 filed by a contractor in 2014

Hh1. Account Gerry likes driving small cars and buys nearly identical ones whenever the old one needs replacing. Typically, he trades in his old car for a new one costing about $16,000. A new car warranty covers all repair costs above standard maintenance (standard maintenance costs are constant over the life of the car) for the first two years. After that, his records show an average repair expense (over standard maintenance) of $2600 in the third year (at the end of the year). increasing by 50 percent per year thereafter. If a 30 percent declining-balance depreciation rate is used to estimate salvage values and interest is 9 percent, how often should Gerry get a new car?

III. Assume compound interest is used to solve the following problems. 1. Stanley borrowed $4500.00 from his credit union to do some home renovations. The loan has an annual interest rate of 5.75% and an amortization period of 3 years. a. What is Stanley's monthly payment? b. Calculate the total amount he will pay over 3 years. G Calculate the finance charge on the loan. 2. Adele wants to buy a used car that costs $2900.00. She has $1100.00 saved up for a down payment. a. How much will Adele have to borrow to buy the car? b. She can get a loan at 6.50% per annum with an amortization period of 2 years. What will be her monthly payment? c. What will be the total she pays for the loan? d. How much will the car cost? 3. Calculate the monthly payment, the total amount paid, and the finance charge for the following loans: a $2000.00 at 8.00% per annum for 3 years; b. $10 000.00 at 6.25% per annum for 5 years; and c. $1500.00 at 3.75% per annum for 2 years. 4. Harley used her credit card to…

Subject:- finance

A couple sold their home. In addition to a cash down payment, they financed the remaining balance for the buyer. The loan will be paid off by monthly payments of $300 for 5 years. The couple decides to sell the loan to a local bank. The bank will buy the loan, based on 1% per month interest. How much will the bank pay the couple for the loan? Select one: O a. 35648.74 O b. 3397.40 O c. 13486.51 O d. 1456.03 O e. 31468.53

A couple sold their home. In addition to a cash down payment, they financed the remaining balance for the buyer. The loan will be paid off by monthly payments of $300 for 5 years. The couple decides to sell the loan to a local bank. The bank will buy the loan, based on 1% per month interest. How much will the bank pay the couple for the loan? Select one: O a. 35648.74 O b. 3397.40 O c. 13486.51 O d. 1456.03 O e. 31468.53 You deposit $8000 in year 1, $7500 in year 2, and amounts decreasing by $500 per year through year 10. At an interest rate of 10% per year, determine the annual worth equivalent through year 1 to 10. Select one: O a. 10282.48 O b. 6137.27 O c. 4540.89 O d. 5717.52 O e. 9862.73

Ellery purchases a home with a loan of R149 000. The 30-year loan term and 7,5% interest rate apply to the home loan. Every month, payments are made. How much interest will he pay overall if he purchases the house in accordance with the terms of the loan? a. b. C. d. R226 059 R138 086 R486 160 R375 489

f. Insurance: You are still not done allocating your paycheck. Assume that you pay annually 0.5% of your home value in home insurance. You also pay $1,000/year in auto insurance, $2,500/year in medical and dental insurance, and $350 / year in life insurance. What is your monthly payment for these deductions?

2. Jeffrey purchased a new car. He wishes to set aside enough money in a bank account to pay maintenance on the car for the first 5 years. It has been estimated that the maintenance cost is as follows: Yegr Maintenance Cost 1 P6720 8400 3 10,080 4 11,760 13,440 Assume the maintenance costs occur at the end of each year and that the bank pays 5% interest. How much should Jeffrey deposit in the bank now?

3. You have just taken a job that requires you to move to a new city. In relocating, you face the decision of whether to buy or rent a house. A suitable house costs $300,000 and you have saved enough for the down payment. The (nominal) mortgage interest rate is 10% per year, and you can also earn 10% per year on sav- ings. Mortgage interest payments are tax deductible, interest earnings on savings are taxable, and you are in a 30% tax bracket. Interest is paid or received, and taxes are paid, on the last day of the year. The expect- ed inflation rate is 5% per year. The cost of maintaining the house (replacing worn- out roofing, painting, and so on) is 6% of the value of the house. Assume that these expenses also are paid entirely on the last day of the year. If the maintenance is done, the house retains its full real value. There are no other rele- vant costs or expenses. a. What is the expected after-tax real interest rate on the home mortgage? b. What is the user cost of the house?…

I need more assistance with this sub-part to the question please.

5 . Please answer the whole answer there is more than one answer that needs to be answered

If Yolanda's insurance company cancels her fire insurance policy after 204 days, how much of the $682.00 annual premium will she receive as a refund (in $)? (Round you answer to the nearest cent.) $

Suppose a man took out a 30-year loan with an annual rate of 6% to put an addition on his house. His banker encouraged him to put other expenses into the loan if he wished, so he increased the loan in order to purchase furniture, a new car, and a computer. Suppose the computer cost $1,200. Assume that the loan is an add on loan to calculate parts a. and b. a. What was the amount of interest that he paid on the computer part of his loan? b. What was the total cost of his computer? a. The total interest is $ (Simplify your answer.) (CCS)

Suppose a man took out a 30-year loan with an annual rate of 7% to put an addition on his house. His banker encouraged him to put other expenses into the loan if he wished, so he increased the loan in order to purchase furniture, a new car, and a computer. Suppose the computer cost $1,500. Assume that the loan is an add on loan to calculate parts a. and b. a. What was the amount of interest that he paid on the computer part of his loan? b. What was the total cost of his computer? a. The total interest is $ (Simplify your answer.)

4. You and your spouse are in good health and have reasonably secure careers. You make about $75,000 annually and have opted for life insurance coverage of three times your salary through your employer. With your spouse's income, you are able to absorb ongoing living costs of $55,000 a year. You own a home with a $290,000 mortgage. Other debts include a $15,000 car loan, $7,000 student loan, and $4,000 charged to credit cards. In the event of your death, you wish to leave your family debt-free. One of your most important financial goals involves building an education fund of $100,000 to cover the costs of a four-year university program for each of your two children ages two and four. To date, you have accumulated $25,000 toward this goal in an RESP. Should you die, your beneficiaries would receive a $2,500 death benefit lump-sum payment from the Canada Pension Plan. You also have $35,000 in your company pension plan. Average funeral expenses are $13,800. Your other financial assets are…