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- 13. Mr. John dela Cruz borrowed money from a bank. He receives from the bank P1,340.00 and promised to pay P1,500.00 at the end of 9 months. Determine the following: a. simple interest rate; b. the corresponding discount rate or often referred to as “Bankers Discount”.8. Mr. J dela Cruz borrowed money from a bank. He received from the bank P1,340 and promised to pay P1,500 at the end of 9 months. Determine the following: (a.) simple interest rate, (b.) the corresponding discount rate or often referred to as “Banker’s discounts”.Which of the following investment options willmaximize your future wealth at the end of 18 years?Assume any funds that remain invested will earn anominal rate of 12% compounded monthly.(a) Deposit $8,000 now.(b) Deposit $120 at the end of each month for thefirst 12 years.(c) Deposit $105 at the end of each month for 18years.(d) Deposit a lump sum in the amount of $35,000 atthe end of year 12.
- 1、Calculating present values Calculate the present value of each of the following cash flow streams. Use a discount rate of 10%. $300 received at the end of six years $300 received annually for each of the next six years $300 received annually for each of the next six years $300 received annually for 100 yearsUse the definition of the effective rates of interest and discount. j=[Amount at s+t - Amount at s] / [Amt at s]. d_j=[Amount at s+t - Amount at s] / [Amt at s+t]. For 8 items c & d, if j (d_j) is nominal then effective interest (resp. discount) every mth of a period is j^(m)/m (resp. d^(m)/m).What simple interest rate is equivalent to simple discount rate 15 ½ % in discounting anamount for 9 months?
- Consider a 25-year loan with an annual interest rate of 7 percent and monthly payments of $1,201.53. The discount points charged by the lender at origination are 3 percent and the cost of borrower title insurance and mortgage insurance are, respectively, 0.5 percent and 2.0 percent of the loan amount. Additional fees paid to other third parties (i.e., not the lender) will equal $4,000. What is the loan amount? What is the lender’s yield/IRR? What is the effective borrowing cost (EBC)? USE EXCEL9. A P 15,000 bond which will mature in 10 years and with a bond rate of 15% payable annually is to be redeemed at par at the end of this period. If it is sold now for P 1,390, determine the yield at this price.To eliminate an income gap of 542M, a savings and loan could: (A) conduct an interest rate swap of variable for fixed rate assests of $24M. (B) conduct an interest rate swap of variable for fixed rate assests of $42M. (C) conductan interest rate swap of fixed for variable rate asset of $24M. (D) conudct an interest rate swap of fixed for varable rate assets of $42M.
- 21. Find the annual payments to extinguish a debt of P 10,000 – payable in 5 years at 12%.1. A man borrows P2,000.00 from his friend on October 1, 2001 and promises to pay the principal and exact simple interest at 5% to discharge the debt on June 28, 2002 a. How many days will be charged with interest? b. How much does the man pay back his friend? 2. Find the present value of P2,000.00 due at the end of 8 months if the discount rate is 6%.2. For ten years, a man inherited a 100,000 endowment every three months. He may, however, elect to receive a single lump sum payout at the end of the four-year period. If the cost of money is 14.06 percent compounded quarterly, how much is this lump sum?