A high school student received an $8,000 student loan in 2022. He then paid off the loan with $8,500 (w/ interest) in 2023.. The consumer price index in 2022 was 300 and 327 in 2023. What is the real interest rate on the loan?
Q: Consider an American put option with time to expiry 15 months, and a strike of 74. The current price…
A: Binomial tree : A binomial tree is a representation of the intrinsic values of an option taken at…
Q: Which of the following will most probably have the lowest WACC? 99% Debt, 1% Debt 100% Equity None…
A: The question is related to Capital Budgeting and cost of capital. The Weighted Average Cost of…
Q: An investor owns 10,000 dollars of Adobe Systems stock, 15,000 dollars of Dow Chemical, and 25,000…
A: Weight of each stock in a portfolio will be the proportion of the investment in that stock in the…
Q: 1. Create and Income Statement with schedules for BLAZING ENTERPRISES for the Year Ended December…
A: Income statement is also known as Profit and Loss account and it shows all incomes and all expenses…
Q: What will be the value of these deposits 12 years later if earning 9% APR compounded annually?
A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…
Q: A real estate developer bought land for $170 000.00 down and monthly payments of $8 450.00 for 5…
A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…
Q: ZLX Inc owes a consulting firm $1,256,300, payable in 12 months. To fund this bill today, how much…
A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…
Q: QUESTION 6 If I have a simple discount note for 75 days (ordinary interest), a discount of $150, and…
A: The rate of Discount is calculated with the help of following formula Rate of Discount = Discount…
Q: Anne can type 55 words in 1 1/3 minutes. How long will it take her to type 100 words?
A: Here, Total words typed = 55 words Time taken = 1 minute and 20 seconds (1/3*60) To Find: Time taken…
Q: present value
A: Present value refers to the value of some amount present today that is more valuable than the…
Q: Flotation costs and the cost of debt Currently, Warren Industries can sell 15-year, $1,000-par-value…
A: Annual Coupon rate is 12% Par Value is $1,000 Market Interest rate of similar bonds are 12%…
Q: Use the savings plan formula to answer the following question You put $300 per month in an…
A: Future value of investment can be calculated as: = Annuity payment* Future value Annuity Factor…
Q: The $/€ exchange rate is €1 = $1.45, and the €/SFr exchange rate is SFr1 = €0.71. What is the SFr/$…
A: 1) To find the SFr/$ Exchange rate, we need to find the cross rate, SFr/$ = €/$ * SFr/€…
Q: On January 1, 2021, Relay Company issued a 3-year, 12% bonds with face value of P3,000,000. Interest…
A: The total value of the bond can be computed as follows:- Value of interest= P3000000*12% =…
Q: McDonald's major distribution partner, The Martin-Brower Company, needs at least $1 million to build…
A: Future Value of Ordinary Annuity refers to the concept which gives out the compounded or future…
Q: How much should Elizabeth have in a savings account that is earning 4.50% compounded quarterly, if…
A: Given: Particulars Amount Amount(PMT) $1,550 Years 10 Interest rate 4.50%
Q: Consider the position of a call writer who sold a call option on Australian dollars at an exercise…
A: For a writer of a call option, The Payoff will be, = - Maximum of ( 0 or S - K) ; S =…
Q: Question 2 → The Management of "TanjungUdaBerhad" is planning a RM4,000,000 expansion this year. The…
A: INDIFFERENCE POINT/RANGE OF EARNINGS CHART/EPS EQUIVALENCY/EBIT-EPS ANALYSIS :- It is that level of…
Q: Given the following holding-period returns, LOADING... , compute the average returns and the…
A: Given: Risk free rate 6% Beta 1.87 Month Zemin Corp Market 1 5% 6% 2 2% 1% 3 2% 0%…
Q: When examining tax, the optimal debt level is proportional to its current earnings. D. The…
A: Managers choose internal finance over outside sources. The weighted average cost of capital, risk…
Q: State the difference between secondary market and primary market.
A: Financial Markets refer to the place where financial assets or securities are being created,…
Q: If you'd like to have $5,000,000 at retirement in 45 years and you expect to earn 10% annually,…
A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at…
Q: How much of the firm's market value is accounted for by the debt-generated tax shield? (Enter your…
A: WACC: It represents the average cost of capital for the firm. It is calculated by the sum of the…
Q: If the current USDJPY exchange rate is 135.00 Japanese yen per U.S. dollar, the price of a Big Mac…
A: The law of one price is a concept which will advocate for uniform price across different nation for…
Q: An investor places $X into an account earning monthly compounded interest, and makes no further…
A: The present value will worth more in future due to time value of money concept(Earn interest on…
Q: QUESTION 2 Mr. Alex, a British arbitrageur, has the following data. The one-year interest rate…
A: Arbitrage opportunity is one where profit is earned simply due to the difference in interest rates…
Q: Industrial Incorporated has current assets of $7,500, current liabilities of $6,500, long-term debt…
A: As per the accounting principles, Total Assets = Total Liabilities+ Equity
Q: Suppose you buy a Merck put for $2.50 which matures in September with a strike price of $50. Merck…
A: Return on put option is calculated as follows (Strike price - Current price) - Purchase cost of put…
Q: Bonds issued years ago by the ABC Company will make annual coupon payments of $70 at the end of each…
A: Solution:- Bond price means the price at which the currently selling in the market. Bond price =…
Q: SellFridges is estimating the terminal cash flow associated with an investment project. The proposed…
A: Here, Machine costs = $100,000 Installation costs = $20,000 Useful life = 5 years Salvage value =…
Q: ZLX is seeking a bank to place short-term deposits at a good rate. Bank A is offering 3.5% APR…
A: EAR stands for an effective annual rate, which is used to calculate the real adjusted necessary…
Q: Bank ZLX is marketing their new fund by noting that a fixed $320 monthly deposit in their fund…
A: Future value of annuity Annuity is a series of equal fixed payment at equal interval over the…
Q: What is the average annualized forward premium/discount for the JPY if you use the 2M forward…
A: Working Note #1 Calculation of mid spot rate: Mid spot rate= 121.112 + 121.2332=242.345 /2 =…
Q: Your firm would like to evaluate a proposed new operating division. You have forecasted cash flows…
A: Continuation value/ terminal value : The terminal value of a corporation is calculated by…
Q: (a) A sum of $2000 is deposited in a time-deposit account that pays interest at a rate of 3% per…
A: Here we will use the concept of time value of money. As per the concept of time value of money the…
Q: Which option should you choose? Enter 1 or 2.
A: Future Value: It is calculated by compounding the present amount with an appropriate interest rate.…
Q: What happens to the price of a three-year annual coupon paying bond with an 8% coupon when interest…
A: When the interest rate is equal to the coupon offered by the bond then the price of the bond is…
Q: Barry Swifter is 60 years of age and considering retirement. Barry's retirement portfolio…
A: Here, Expected Return $ Value Treasury bills 2.5% 90,000 …
Q: Jackie Marte purchased tve $1000 corporate bonds issued by Starbucks The bonds pey 5.90 percente…
A: Interest per annum can be calculated as: = Face Value of the Bond * Coupon rate
Q: PLEASE SKIP IF YOU ALREADY ANSWERED. I WILL UPVOTE
A: The question is related to Ratio Analysis. 1. Current Ratio is calculated by dividing Current Assets…
Q: Humanics Ltd is considering a proposed investment to manufacture medical equipment for a large-scale…
A: While evaluating a capital project, only those cash flows are considered that are resulted due to…
Q: Compare which alternative which prefer using multiple attribute individual analysis present worth…
A: Since the life of both alternatives are different, we cannot diretcly base our decision on Present…
Q: Consider two assets A and B with expected return as 9% and 5%, respectively. Standard deviation of…
A: The Expected Portfolio or the overall rate of return of the Portfolio is the total return which is…
Q: OCF
A: Operating cash flow refers to the inflows and outflows of cash transactions that are related to…
Q: Schools across Ghana were closed for some time. This was to curb the spread of the fast-spreading…
A: Outbreak of the coronavirus caused liquidity problems for several business and nonprofit entities.…
Q: What are the benefits of merging and diversifying one's assets in order to lower one's risk?
A: Diversification is a process of combining different types of assets with lower correlation in order…
Q: Finance Discuss the THREE (3) forms of market efficiency.
A: Market efficiency- It can be best described as the degree to which the information is made available…
Q: 9.7. You are to calculate rates effective for the year beginning Jan. 1, 2020 for one-year policies…
A: The amount of money an insurer is obligated to pay to cover claims, including the costs of…
Q: ONLY PLEASE FOR UPVOTE. DOWNVOTE FOR HANDWRITTEN. DO NOT ANSWER IF YOU
A: The annual interest is calculated with the help of following formula Annual Interest = Face Value…
Q: Q- if Russell's annual earnings are $47500, what is his semi-monthly pay, rounded to the nearest…
A: Cash Flows: Cash flows are the cash generated from the operation of the business organization. In…
M1
Step by step
Solved in 2 steps
- If 90,000 is invested in a fund on December 31, 2019, and 5 equal annual withdrawals of 23,138.32 are made starting on December 31, 2020, that will deplete the fund, what is the interest rate being earned if interest is compounded annually?Determining Loan Repayments Jerry Rockness needs 40,000 to pay off a loan due on December 31, 2028. His plans included the making of 10 annual deposits beginning on December 31, 2019, in accumulating a fund to pay off the loan. Without making a precise calculation, Jerry made 3 annual deposits of 4,000 each on December 31, 2019, 2020, and 2021, which have been earning interest at 10% compounded annually. Required: What is the equal amount of each of the next 7 deposits for the period December 31, 2022, to December 31, 2028, to reach the fund objective, assuming that the fund will continue to earn interest at 10% compounded annually?On January 1, 2018, Kline Inc. borrowed P9,000 from Harvard Co., and on January 1, 2020, it borrowed P12,000. On January 1, 2021, Kline Inc. paid a P7,000 half payment. The loan balance would be amortized over two payments, one on January 1, 2022 and the other on January 1, 2023, with the second payment being 50 percent bigger than the first. What is the amount of each payment if the interest rate is 10%?With a bit of explanation please.
- On December 31, 2019, Panda Bank recorded an investment of P5,000,000 in a loan granted to a client. The loan has a 10% effective interest rate payable annually every December 31. The principal is due in full at maturity on December 31, 2022. Unfortunately, the borrower is experiencing significant financial difficulty and will have difficult time in making full payment. The bank projected that the entire principal will be paid at maturity and 4% interest or P200,000 will be paid annually on December 31 of the next three years. There is no accrued interest on December 31, 2019. The PV of 1 at 10% for three periods is 0.75, and the PV of an ordinary annuity of 1 at 10% for three period is 2.49. What is the loan impairment loss for 2019? A. P600,000 B. P752,000 C. P250,000 D. P748,000If you borrow $ 18,500 at an annual interest rate of 7.5% on September 14, 2019, and pay the loan back on January 12, 2020. What are the proceeds of the loan using the banker’s rule at the approximate time?On December 31, 2021, Cholo Bank recorded an investment of P 5,000,000 in a loan granted to a client. The loan has a 10% effective interest rate payable annually every December 31. The principal is due in full at maturity on December 31, 2024. Unfortunately, the borrower is experiencing significant financial difficulty and will have difficult time in making full payment. The bank projected the entire principal will be paid at maturity and 200,000 will be paid annually on December 31 of the next three years. There is no accrued interest on December 31, 2021. The present value of 1 @ 10% for three periods 0.75 The present value of an ordinary annuity of 1 at 10% 2.49 What is the impairment loss for 2021?
- Suppose it costs $18,000 per year (in early 2014 dollars) for tuition, room, board, and living expenses to attend a public university in the Southeastern United States. Solve, a. If inflation averages 8% per year, what is the total cost of a four-year college education starting in 2024 (i.e., 10 years later)? b. Starting in January of 2014, what monthly savings amount must be put aside to pay for this four-year college education? Assume your savings account earns 6% per year, compounded monthly (0.5% per month).On January 1, 2021, Saltimbocca Corporation borrowed $192,772 from Morgan Stanley. Under the terms of the loan, Saltimbocca will pay $500,000 to Morgan Stanley in ten years (on December 31, 2030), which implies that the yield to maturity (or implicit interest rate) on the loan is 10.0%. What is Saltimbocca’s interest expense on the loan for the year ended December 31, 2023 (the third year of the loan)? (Hint: Round to the nearest dollar. Do not use any dollar signs, commas, or decimals in your answer).What lump-sum amount of interest will be paid on a $10,000 loan that was made on August 1, 2012, and repaid on November 1, 2016, with ordinary simple interest at 10% per year?
- Every year, on 1st January, starting in 2020 and ending in 2049 (so 30 payments), you deposit $1,000 into a bank account. What rate of return would you need to earn on the account so that on 31st December 2049, just after that year's interest was paid into the account, you had $50,000 in the account?You wish to deposit $500 dollars per year. The first deposit will be on April 1, 2017, and your last deposit will be on April 1, 2026. How much will be in the account on April 1, 2050 if the bank pays 4% annually?On January 1 2021, you will purchase a $350,000 house. To pay for the house you will pay 20% down (in Cash) and borrow the remainder under a 30 year mortgage with a contractual interest rate of 3.35% Your market rate of interest, for the risk you pose, is 4.5% Your payments are due at the end of each month with the first payment due 1/31/2021. How much interest (rounded to the nearest dollar) will you repay during the time period of 2022-2025 ((the second through fifth year of the loan))
