1. A)Your Landscaping company can lease a truck for $8,000 a year (Paid at year end ) for 6 years. It can instead buy the truck for $40,000. The truck will have a salvage value $7000 at the 6th year. If R = 7%, IS IT CHEAPER TO BUY OR LEASE?
1. A)Your Landscaping company can lease a truck for $8,000 a year (Paid at year end ) for 6 years. It can instead buy the truck for $40,000. The truck will have a salvage value $7000 at the 6th year. If R = 7%, IS IT CHEAPER TO BUY OR LEASE?
B.) Suppose you retire at age 70, with a life expectancy of 20 more years, and you expect to spend $55,000 a year during your retirement. How much money do you need to save by age 70 to support this consumption plan? Assume an interest rate of 7 percent. Show me: BY Tabular Method
2) $ 675 bond matures in 16.5years. Coupon rate 13.39%. Payment made biweekly. R = 24.89%. After 5-years coupon rate becomes 12% and payment made weekly. R = 3%. What is your
3) Bond matures in 15 years. Coupon rate 18%. Payment made in weekly. R = 12%.
After 10-years coupon rate becomes 6% and payment made semi-annually. If R = 8%. What is the rate of returns over the year (ROR)?
4) Let D3 = $4
Growth Rate g = 10% next 3 years starting from Today.
After that growth rate g = 15% rate next 1 year
After that growth rate g = 17% rate next 1 year
After that growth rate g = -5% forever
If R = 15 % . FIND STOCK PRICE TODAY (Po)
5) Let D0 = $7
Growth Rate g = 10% next 1 years starting from Today.
After that growth rate g = 8% rate next 2 year
After that growth rate g = 12% rate next 1 year
After that growth rate g = 15% forever
If R = 25 % . FIND STOCK PRICE TODAY (Po)
6.) Retirement Planning OR PENSION PLANNING )
Now you are 22 Years old, want to retire at the age of 65. You would like to have $70,000 semiannual payment until you are 103 years old. You inherited ( Gift) $ 60,000 at the age of 38 and $10,000 at the age of 48. Please calculate how much you must save biweekly to receive $ 70,000 semiannually by the two following ways: USE (R = 8.5%)
A) Biweekly Payment without gift.
B) Biweekly Payment with gift.
7) House cost = $ 450,000.
20% down payment.
30 years mortgage .
Bank interest rate is 26% (r=26%).
Tell me how much your monthly payment will be.
After 20 years the market interest rate becomes 15% (r=15%). Because of the lower interest rate you would like to refinance your house with a lower interest rate and would like to pay back money to the bank bi-weekly. Tell me how much your bi-weekly payment will be.
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