14. A loan of $17,000 is made at 4.99% simple discount interest for 180 days. a. What are the proceeds? b. What is the effective rate of the loan (APY)?

Essentials Of Investments
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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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14. A loan of $17,000 is made at 4.99% simple discount interest for 180 days.
a. What are the proceeds?
b. What is the effective rate of the loan (APY)?
15. On May 5, Drew took out a loan for $44,000 at 5.8% simple interest to upgrade the security system in his
company's warehouse. On June 5, Drew made a payment of $18,000.
a. Use the Actuarial Method to determine the new balance of the loan on June 5?
b. What is the payoff amount on July 5?
16. If $2940 is invested at 3.2% compounded quarterly, how much is in the account after 8 years?
17. Find the length of the loan if an investment of $5109 grows to $10,776 at a rate of 9% compounded daily.
Give your answer in years.
18. Find the amount that must be invested at 8.5% compounded monthly to have $20,000 for a house down
payment in 6 years.
19. What is the total interest earned if $200 is deposited at the beginning of each month for 10 years if the
investment earns 7.8% compounded monthly?
20. What is the monthly payment on a mortgage of $125,000 at 4.25% compounded monthly if payments are
made at the end of the month for 30 years?
21. A retirement account has $210,000 today. How much can be withdrawn at the end of each month if the
account needs to last for 15 years and it earns 4.9% compounded monthly?
Transcribed Image Text:14. A loan of $17,000 is made at 4.99% simple discount interest for 180 days. a. What are the proceeds? b. What is the effective rate of the loan (APY)? 15. On May 5, Drew took out a loan for $44,000 at 5.8% simple interest to upgrade the security system in his company's warehouse. On June 5, Drew made a payment of $18,000. a. Use the Actuarial Method to determine the new balance of the loan on June 5? b. What is the payoff amount on July 5? 16. If $2940 is invested at 3.2% compounded quarterly, how much is in the account after 8 years? 17. Find the length of the loan if an investment of $5109 grows to $10,776 at a rate of 9% compounded daily. Give your answer in years. 18. Find the amount that must be invested at 8.5% compounded monthly to have $20,000 for a house down payment in 6 years. 19. What is the total interest earned if $200 is deposited at the beginning of each month for 10 years if the investment earns 7.8% compounded monthly? 20. What is the monthly payment on a mortgage of $125,000 at 4.25% compounded monthly if payments are made at the end of the month for 30 years? 21. A retirement account has $210,000 today. How much can be withdrawn at the end of each month if the account needs to last for 15 years and it earns 4.9% compounded monthly?
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