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21. If you invest $5000 now, compounding (Express in terms of %) 871410

21. If you invest $5000 now, compounding (Express in terms of %) 871410

Essentials Of Investments
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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a. True b. False 21. If you invest $5000 now, compounding 10% interest/year for the 30 years. What is your ROR (Rate of Return) at the end of the 30th year? (Express in terms of %) 87 2410 22. You want to get a house loan, you know you can afford to pay $1300 a month for 30 years. Your research indicates interest rates on mortgages to be 6% annually, which is compounded monthly, how much can you afford now? 23. You purchase a house for $500k and take out a bank loan for the same amount with a period of 30 years. You are comparing two nominal interest rates 5% and 7% respectively a year compounded monthly. Calculate the difference in monthly payment. (round to the nearest S) 24. You put $400,000 in a trust fund. If the annual interest rate is 4%, compounded yearly, how much will the fund yield after the end of the first year? a. $16,000 b. $1,600,000 c. $416,000 d. $1,333.33 e. Can't be determined (130)
Transcribed Image Text:a. True b. False 21. If you invest $5000 now, compounding 10% interest/year for the 30 years. What is your ROR (Rate of Return) at the end of the 30th year? (Express in terms of %) 87 2410 22. You want to get a house loan, you know you can afford to pay $1300 a month for 30 years. Your research indicates interest rates on mortgages to be 6% annually, which is compounded monthly, how much can you afford now? 23. You purchase a house for $500k and take out a bank loan for the same amount with a period of 30 years. You are comparing two nominal interest rates 5% and 7% respectively a year compounded monthly. Calculate the difference in monthly payment. (round to the nearest S) 24. You put $400,000 in a trust fund. If the annual interest rate is 4%, compounded yearly, how much will the fund yield after the end of the first year? a. $16,000 b. $1,600,000 c. $416,000 d. $1,333.33 e. Can't be determined (130)
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