1. LNU was able to earn a apply for a loan to invest for future university expansion. If the university where to choose a simple investment way of paying. If the initial 60, 000 PHP loan where to grow to 90, 000 PHP in 5 years. How high did the lender set his annual interest rate?
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- a college can purchase a telephone system for $35000 or lease a system for 5 years for a front-end charge and regular payments of $1500 at the beginning of every quarter (including the first quarter). The system can be purchased at the end of the lease period for $3000 a) should the college lease or buy the system if it can borrow funds at 5% compounded quarterly? b) what is the current economic value of the saving with the lower cost option?Computing the cost of a discount interest loan The financial managers at Montross Corporation are arranging the financing for working capital requirements for the upcoming year. Montross’s local bank offers a discount interest loan at a quoted (simple) interest rate of 4.00%. With a discount interest loan, interest is payable up front, and the actual amount received is less than the face amount of the loan. Suppose Montross applies for a $200,000 loan with a nine-month term. Calculate the interest payment, the amount of cash received, the annual percentage rate (APR), and the effective annual rate (EAR) of this loan. (Fill In) Value Interest payment ________________ Amount of cash received ________________ Annual percentage rate (APR) ________________ Effective annual rate (EAR) ________________ What is the nine-month rate if the bank charges a $100 processing fee? Pick one choice. 3.15% 4.12% 3.05% 2.84%Assume the total cost of a university education will be €290,000 when your child enters college in 18 years. You presently have €40,000 to invest. Required: What annual rate of interest must you earn on your investment to cover the cost of your child’s university education? (Round your answer to 2 decimal places (e.g., 32.16).) Annual rate of interest %
- How did you get the 6.14 in your solution to this: A master of accountancy degree at Central University costs $12,000 for an additional fifth year of education beyond the bachelor’s degree. Assume that all tuition is paid at the beginning of the year. A student considering this investment must evaluate the present value of cash flows from possessing a graduate degree versus holding only an undergraduate degree. Assume that the average student with an undergraduate degree is expected to earn a salary of $50,00 per year (assumed to be paid at the end of the year for 10 years. Assume that the average student with a master of accountancy degree is expected to earn a salary of $66,000 per year (assumed to be paid at the end of the year) for nine years after graduation. Assume a minimum rate of return of 10%. Round to the nearest dollar. Determine the net present value of cash flows from an undergraduate degree. Use the present value of an annuity table appearing in Exhibit 5 of this…Jefferson Bank lent a newly graduated engineer $1000 at i = 10% per year for 4 years to buy home office equipment. From the bank’s perspective (the lender), the investment in this young engineer (the borrower) is expected to produce an equivalent net cash flow of $315.47 for each of 4 years. A = $1000(A/P,10%,4) = $315.47 This represents a 10% per year rate of return on the bank’s unrecoveredbalance. Compute the amount of the unrecovered investment for each of the 4 years using (a) the rate of return on the unrecovered balance (the correct basis) and (b) the return on the initial $1000 investment (the incorrect basis).University tuition and fees can be paid by using one of two plans. Early-bird: Pay total amount due 1 year in advance and get a 10% discount. On-time: Pay total amount due when classes start. The cost of tuition and fees is $20,000 per year. (a) How much is paid in the early-bird plan? (b) at an interest rate of 6% per year, what is the equivalent amount of the savings compared to the on-time payment, that is, 1 year later than the early-bird plan?
- To provide for university education fees, money needs to be saved today. What single amount is needed to provide for $6,000 in 6 years, $7,000 in 7 years, $8,000 dollars in 8 years and $9,000 dollars in 9 years at a rate of 4.5% per year?An FI is planning the purchase of a $4 million loan to raise the existing average duration of its assets from 4.8 years to 6.3 years. It currently has total assets worth $20 million, $4 million in cash (0 duration), and $16 million in loans. All the loans are fairly priced. a-1. Assuming it uses the cash to purchase the loan, calculate the duration of the existing loan. a-2. Assuming the FI uses the cash to purchase the loan and that the loan has a 8.3 year duration, calculate the resulting duration of the asset portfolio. a-3. Should it purchase the loan if its duration is 8.3 years?b. What asset duration loans should it purchase in order to raise its average duration to 6.3 years?Suppose a graduate student receives a non-subsidized student loan of $13,000 for each of the 4 years the student pursues a PhD. If the annual interest rate is 5% and the student has a 10-year repayment program, what are the student's monthly payments on the loans after graduation? (Round your answer to the nearest cent.)
- Suppose someone wants to accumulate $55,000 for a college fund over the next 15 years. Determine whether the following investment plans will allow the person to reach the goal. Assume the compounding and payment periods are the same. The person deposits $60 per month into an account with an APR of 7%. Will the person meet the goal? Select the correct choice below and fill in the answer box to complete your choice. A. No, because the amount that will be in the college fund, $enter your response here, is less than the goal of $55,000. B. Yes, because the amount that will be in the college fund, $enter your response here, is more than the goal of $55,000.Answer the Situation below correctly show your complete solution. A deposit of 120 000.00 Php is placed into a college fund at the beginning of every month for 10 years . The fund earns 9 % annual interest , compounded monthly , and paid at the end of the month . How much is in the account right after the last deposit ? c . The number of conversion period is_____________________________.d . The interest rate per period is___________. e . The present value of the deposit is___________. (I just need the Solution) Answers: c. 12; d. 0.075; e. 30 000.00 PhpSuppose that you have $1,000,000 available for investment for a period of four years. After investigating the local banks, you have compiled the following table for comparison. Bank Interest Rate Compounding Scotia Bank 10% Annually National Commercial Bank 9% Semi-annually First Caribbean International Bank 6.8% Quarterly Using the Future Value concept (based on calculation), in which bank should you deposit your funds to maximize return and why?
