Solutions to Quiz 5

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School

York University *

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4541

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Finance

Date

Apr 3, 2024

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xlsx

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Uploaded by CaptainMaskFerret26

Q6. What will be the monthly payment on a home mortgage of $75,000 a -$771.46 Q7. Three thousand dollars is deposited into an account paying 10% annu Initial deposit $ 3,000.00 Years Opening Balance Amount in bank with interest 1 $ 3,000.00 $ 3,300.00 2 $ 2,093.66 $ 2,303.03 Q8. Approximately how much must be saved for retirement to withdraw $ 7,310,594.00 Q9. How much more is a perpetuity of $1,000 worth than an annuity of th Present Value of Perpetuity = C / r 10,000.00 Present Value of Annuity = 8,513.56 Difference 1,486.44 Q10. Assume the total expense for your current year in college equals $2 -$3,973.11 -> PV Function Mortgage A: 30 years @ 9% interest 100,000 Mortgage B: 15 years @8.5% interest 100,000 Mortgage A: Total Principal repaid - 100,000.00 Total Interest repaid - 189,664.14 Total Payment - 289,664.14 Mortgage B: Total Principal repaid - 100,000.00 Total Interest repaid - 77,253.12 Total Payment - 177,253.12 Q11. A loan officer states, "Thousands of dollars can be saved by switchin 8.5% interest. Both mortgages are for $100,000 and have monthly payme rates are compounded monthly.)

Difference - 112,411.02 Q12. With $1.5 million in an a/c expected to earn 8% pa over the retiree's PV $1,500,000.00 N 30 R 8% Q13. If $120,000 is borrowed for mortgage, to be repaid @9%pa over 30 y Total interest paid - 227,596.97 Years Amount 1 28,000 26,107.23 2 35,000 30,428.00 3 42,000 34,045.32 90,580.55 Q15. "Give me $5,000 today and I'll return $10,000 to you in 5 years," off RATE Function 14.87% Q16. What is the APR on a loan that charges interest at the rate of 1.4% p 16.8 Q17. What will be the approximate population of the Canada, if its curren Future Value $57,421,209.81 Q18. Would you prefer a savings account that paid 7% interest compound Let's assume $1,000 invested in all four for 1 year 7% compunded quarterly Payments PMT 1 $261.03 2 $261.03 3 $261.03 4 $261.03 $1,044.13 Q14. Lester's just signed a contract that will provide the firm with annual contract worth today at a discount rate of 7.25%?

at 12% interest compounded monthly, to be amortized over 30 years? -> PMT Function ually to provide three annual withdrawals of $1,206.34 beginning in one year. How much Amount withdrawn Closing Balance 1,206.34 $ 2,093.66 1,206.34 $ 1,096.69 $100,000 per yr for the next 25 years if the balance earns 8% pa, and first pmt occurs 1 y he same amount for 20 years? Assume an interest rate of 10% and cash flows at the end 20,000. How much would your parents have needed to invest 21 years ago in an account Monthly payments Monthly payments ng to a 15-year mortgage from a 30-year mortgage." Calculate the difference in payment ents. What is the difference in total dollars that will be paid to the lender under each loan   Annuity of for periods with Interest Rate PV C N r

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s 30 yrs of life expectancy, what annual annuity can be withdrawn, beginning today? $120,000.00 yrs with monthly pmts of $965.55, how much interest is paid over life of loan? ffers the investment broker. To the nearest percent, what annual interest rate is being off per month? APR -> Annual Percentage Rate nt population of 35 million grows at a compound rate of 2% annually for 25 years? ded quarterly, 6.8% compounded monthly, 7.2% compounded weekly, or an account that 6.8% compounded monthly 7.2% compounded weekly Payments PMT Payments PMT 1 $86.43 1 $19.94 2 $86.43 2 $19.94 3 $86.43 3 $19.94 4 $86.43 4 $19.94 5 $86.43 5 $19.94 6 $86.43 6 $19.94 7 $86.43 7 $19.94 8 $86.43 8 $19.94 cash inflows of $28,000, $35,000, and $42,000 over the next three years with the first p

9 $86.43 9 $19.94 10 $86.43 10 $19.94 11 $86.43 11 $19.94 12 $86.43 12 $19.94 $1,037.21 13 $19.94 14 $19.94 15 $19.94 16 $19.94 17 $19.94 18 $19.94 19 $19.94 20 $19.94 21 $19.94 22 $19.94 23 $19.94 24 $19.94 25 $19.94 26 $19.94 27 $19.94 28 $19.94 29 $19.94 30 $19.94 31 $19.94 32 $19.94 33 $19.94 34 $19.94 35 $19.94 36 $19.94 37 $19.94 38 $19.94 39 $19.94 40 $19.94 41 $19.94 42 $19.94 43 $19.94 44 $19.94 45 $19.94 46 $19.94 47 $19.94 48 $19.94 49 $19.94 50 $19.94 51 $19.94 52 $19.94 $1,037.12

h remains in the account after second pmt is withdrawn? year from now? of each period. paying 8% compounded annually to cover this amount? Future Value of an Annuity = C (((1+i)^n - 1)/i) ts on a 30-year mortgage at 9% interest versus a 15-year mortgage with n? (Round the monthly payment amounts to 2 decimal places. Both interest               1 1 erest Rate 1- 1 N r C r r

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ffered? t paid 7.5% with annual compounding? 7.5% compomded annually Payments PMT 1 $1,075.00 $1,075.00 It is the most in 7.5% componded annually payment of $28,000 occurring one year from today. What is this