1) A 20-year loan of $1,100 at an effective annual interest rate of 7% is repaid with payments atthe end of each year. Each of the first ten payments equals 150% of the amount of interestdue. Immediately after the tenth payment, you take out a 10 year loan with payments $100 at the end of eachyear and effective annual interest rate of i and use this loan to pay off your original loan. Find i.

Step 1: Understand the ProblemYou have a 20-year loan of $1,100 at an effective annual interest rate…

Answered: 1) A 20-year loan of $1,100 at an…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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6) A loan of 1000 at a nominal annual interest rate of 10% + x compounded monthly is repaid by four monthly payments, starting one month after the loan is made. The first two payments are amount X each and the final two are amount 3X. Construct the amortization schedule for this loan.
A loan of 80,000 is repaid using the amortization method by annual payments at the end of each year for ten years. The first payment, one year from today is X. Each subsequent payment is 1,600 higher. The annual effective of the loan is 5%. Find the first payment and the interest portion of the first payment.
Consider a student loan of $25,000 at a fixed APR of 12% for 20 years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest. a. The monthly payment is $ (Do not round until the final answer. Then round to the nearest cent as needed.)
4. Establish loan amortization schedules for 3-year loan of $20,000 (initial loan) with equal payments at the end of each year. The interest rate is 5 percent per year. i NOTE: PLEASE SHOW HOW YOU COMPUTE EACH OF THE ITEMS.
A demand loan of $5000.00 is repaid by payments of $2500.00 after two years, $2500.00 after four years, and a final payment after six years. Interest is 99% compounded quarterly for the first two years, 10% compounded monthly for the next two years, and 10% compounded annually thereafter. What is the size of the final payment? The final payment is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Complete the following from the first three lines of an amortization schedule for the following loan:You borrow $ 165000 with an annual interest rate of 7.5% over 15 years Starting principal = $ 165000New balance after month 1 payment = New balance after month 2 payment = New balance after month 3 payment =
A $3,000,000 apartment complex loan is to be paid off in 10 years by making 10 equal annual payments. How much is each payment if the interest rate is 7.5% compounded annually? (a) State the type. A. present valueB.sinking fund C.present value of an annuityD.amortizationE.ordinary annuity (b) Answer the question. (Round your answer to the nearest cent.)
using excel do the following Create an amoritization schedule for a $1,000,000 loan that requires equal annual payments in each of the next 10 years. The annual rate is 6%. How much is the remaining loan balance after 5 years? Analyze the amount of each equal payment that goes towards interest and principal in each year. What do you notice?
A loan is to be repaid by $1250 in 1.5 years and $1750 in three years and three months . The borrower has asked to repay $1000 in two years and a final payment in four years. If money can earn 8% compounded semi annually, what is the size of the final payment? Select one: a. 2206 b. 1200 c. none of them d. 1372 e. 1468
Complete the following from the first three lines of an amortization schedule for the following loan:You borrow $ 210000 with an annual interest rate of 6.25% over 20 years Starting principal = $ 210000New balance after month 1 payment = New balance after month 2 payment = New balance after month 3 payment =
4. You borrow $720,000 at 4.00% per year compounded monthly and you plan to pay off this loan in equal annual payments starting one year after the loan is made over a period of fifteen (15) years. What are the annual end-of-year payments? Determine the amount of interest and principal that are paid each year. What is the total interest paid for the loan? a. b. Restructure the loan in the previous question to make payments monthly. Determine the savings in interest overall. C. Restructure your payment schedule once more to make payment every two weeks. Determine the savings in interest (if any) in this case (compare to both previous repayment options). 1 OF 1
Consider a loan of $1,000 for five years with 10% add-on interest and the loan is to be paid off in five year-end payments. The funds that are borrowed (available to the borrower) are $1,000 and the “interest” is $100 × 5 = $500. The installments are calculated based on a loan principal amount of $1,000 + 500 = $1,500: $1,500/5 = $300 each. How much is the borrower really paying to borrow $1,000? Let’s restate this loan in more familiar terms: Present value = $1,000 Number of payments = 5 Amount of each payment = $300 and $1,000 = $300(present value of an annuity for T = 5 and r = ?) What is r=?

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