5. Leah owes her dad $24,000. They have agreed on a payment plan where she pays $7,000 in one year, $8,000 in two years, and $9,000 in three years. Luckily, Leah has managed to win a $35,000 lottery. Her dad has offered to allow her to settle the debt today for $21,000. Assuming a market interest rate of 7.05%, should Leah pay early?
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- 6) Susan is looking to purchase her first home five years from today. The house costs $1,550,000. She will have to make a down payment of 10% of this amount and plans to take a loan from the bank for the difference. Bank charges are approximately 15% of the loan amount. She plans to start saving from today to cover both the down payment and the bank charges. a. How much will she need to save to cover both the down payment and bank charges? b. If she currently has $195,000 in her account and will make no further deposits over the next five years, what rate of interest must she earn on this account in order to achieve the savings target calculated in part (a) above?Alan loans $3750 to Betty at a 6.2% simple interest rate. Betty agrees to repay the loan after 13 months. After 3 months, Alan needs money unexpectedly, so he sells the loan to Chris for $3800. What annual rate of simple interest does Chris earn on this investment? Give your answer as a percentage, rounded to 2 decimal places.Bonita intends to open a small fabric shop and borrows the money for it from her aunt Magda. Bonita feels that she will only be able to start repaying her debt after three years. Bonita will then pay aunt Magda R105 000 per year for five years. Money is worth 19,5% per year. The present value of Bonita’s debt at the time she will start paying aunt Magda back is [1] R408 978,93. [2] R317 500,78. [3] R222 924,04. [4] R525 000,00. [5] R436 649,07.
- Maria wants to attend Clarke University. She will need $90,000 eight years from today. Assume Maria's bank pays 6% interest compounded semiannually. What must Maria deposit today to have $90,000 in eight years? verify your answer.9) Crispin wants to buy a motorcycle. His mother will loan him some money at only 6% compounded quarterly. If Crispin estimates that he will be able to repay a total of P3,600 in 2 years, A. How much should he borrow from his mother today? B. How much is the discount interest that his mother will gain out of the loan? 10) Compute the sim Intorart and final amount of onch Jonn4) Dottie has decided to set up an account that will pay her granddaughter $5,000 a year indefinitely. How much should Dottie deposit in an account paying 8 percent annual interest?
- George wants to purchase a home. After his down payment, he needs to finance $500,000. He gets a 25 year Adjustable Rate Mortgage (ARM) with an initial APR of 3.9%. a) What would be his monthly payment (rounded to the nearest dollar)? b) After 3 years, the bank raises his APR to 4.2% What would his new monthly payment be (round to the nearest dollar) ? $ c) If his income is $175,000 per year, what percent of his monthly income goes to paying his mortgage after 3 years?Charisma is able to pay $1250 a month for a 25-year mortgage with end of month payments. Because of a family gift, Charisma can make a 20% cash down payment to purchase a house. If the interest rate is 5.4%, then how much house can Charisma afford to buy? Answer to two decimal places.Donna wants to buy a house for $900,000.00. She makes a 15% down payment and borrows the rest by getting a 30-year mortgage. Her monthly mortgage payment is $3,803.75. What is the principal of her mortgage? What is the total she will pay on the loan?
- 3. What house value can Betty afford? Betty's annual income is $90,000 and she has monthly credit payments of $500. She is looking for a house financed by 30 year 6% mortgage with 20% down payment. Property tax and insurance on the home is expected to be $300 per month. Calculate the value of the house she can afford.Annette wants a home improvement loan to renovate her kitchen. Her bank will charge her 3.6%, compounded quarterly. She already has a 10-year GIC that will mature in 5 years. When her GlC reaches maturity, Annette wants to use the money to repay the home improvement loan with one payment. She wants the amount of the payment to be no more than $20 000. a) How much can she borrow? b) How much interest does she pay?6. Mahmoud has to pay three equal payments of $50,000 for a house he is buying, The payments are at the end of year five, 10 and 15, respectively. If the interest rate is 14% how much would he take as a loan to pay for the house? b. а. If Mahmoud decides to pay the remaining balance after paying the second installment in year 10 immediately, how much would he pay at the end of year 10 as repayment for the unpaid balance?