1. Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding. A) 5.98% B) 6.63% C) 4.71% D) 5.65% E) 5.80% 2. How much would you pay for a security that pays you $500 every 4 months for the next 10 years if you require a return of 8% per year compounded monthly? A) $11,228.48 B) $15,000.00 C) $10,260.00 D) $13,724.90 E) $10,200.23 3. You can earn 5% per year compounded annually for the next 4 years, followed by 8% per year compounded quarterly for 5 years. What is the average annual compounded rate of return over the 9 year period? …show more content…
Assuming that you had agreed to charge him 10% per year compounded annually, and assuming that he wishes to make five equal annual payments beginning in one year, how much would your brother-in-law have to pay you annually in order to pay off the debt? (Assume that the loan continues to accrue interest at 10% per year.) A) $738.63 B) $798.24 C) $772.45 D) $697.43 E) $751.46 12. What information to you need to find the 3 year forward rate starting 2 years from now? A) 2 and 5 year zero coupon spot rates B) 3-year zero coupon spot rate C) 2 and 3 year zero coupon spot rates D) 5 year zero coupon spot rate E) 3 and 5 year zero coupon spot rates 13. You have been making payments for the last 25 years and have finally paid off your mortgage. Your original mortgage was for $345,000 and the interest rate was 5% per year compounded semi-annually for the entire 25 year period. How much interest have you paid over the last 5 years of the mortgage? A) B) $120,392.23 C) $13,931.87 D) $80,743.13 E) $106,460.37 14. Which of the following is (are) sources of cash? I. an increase in accounts receivable II. a decrease in common stock III. an increase in long-term debt IV. a decrease in accounts payable A) I, II, and IV only B) II and IV only C) I only D) III only E) I and III only 15. Financial planning allows firms to: I. avoid future
For Investment B: (40 – 5)/ 30= 1.16 standard units= close to 88% to get the 40 million in
The company has an agreement with a bank that allows the company to borrow the exact amount needed at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company will pay the bank all of the accrued interest on the loan and as much of the loan as possible while still retaining at least $50,000 in cash.
| |finance the balance. How much will each monthly loan payment be if they can borrow the necessary funds for 30 years at 9% per |
What annual interest rate is needed to produce $200,000 after five years if only $100,000 is invested?
1) Establish the principal and interest amount of the monthly payment. Using the 30 year loan principal and interest amount of the payment is $1,150.92
10. An investment of $1,000 today will grow to $1,100 in one year. What is the continuously compounded rate of return?
Therefore the annual interest rate is 8% and the effective annual rate compounded quarterly is 8.24%
2. If you had a payment that was due you in 5 years for $50,000 and you could earn a 5% rate of return, how much
Rose paid 8% interest on a $12,500 loan balance. Lily paid $5,000 interest on a $62,500 loan. Based on one year:
if you were to save $2000 dollars a year at 6% for 30 years under the terms of a
After the calculations you end up coming out with a rate of 14.87%. The third and final part of question three asks what rate you will need if the interest is compounded semiannually. All you have to do is double the amount of terms and you will come out with a lower number of 7.177%. Since the interest is compounded semiannually that means that you will need to times that number by two and you come out with your final number of 14.35%.
(Compound annuity) what is the accumulated sum of each of the following streams of payme