Problem #7: A financier has made a loan of $5 million. The contract for the loan calls for payment of interest quarterly at anominal annual rate of 6.6%, until the full principal is repaid in one lump sum at the end of 10 years. After 3 yearshave gone by, immediately after the quarterly payment, the financier decides to sell the asset to an investor. If theinvestor values these cash flows with a nominal annual rate of 3.5% when compounded quarterly, what valuewould the investor consider the remaining loan contract to be worth?Problem #7:Answer in millions of dollars,correct to 3 decimals.

A financier has made a loan of $5 million. The contract for the loan calls for payment of interest…

Answered: A financier has made a loan of S5…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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The company holds a 6-year loan of $230,000, at 7.5% compounded annually. Payments are made quarterly. After 15 months, the terms of the loan are renegotiated at 5.5 %, compounded monthly with monthly payments for the remainder of the 6-year term. Calculate the payment amount for the original loan. Calculate the accumulated value of the original loan principal after 15 months. Assuming that payments had been made, calculate the accumulated value of the payments made in the first 15 months. Calculate the outstanding balance of the original loan after 15 months. Calculate the number of payments in the renegotiated term to repay the loan.
A growing business moved to a new building to serrvice a bigger client pool. The building acquired through a P7M bank loan with 12% interest compounded monthly payable in 10 years. How much is the monthly amortization (periodic payment)?
Mr Bullock wants to purchase a car which costs $200,000 and requires 20% down payment. Period of loan is for 3 years and compounded semi-annually at an interest rate af 12%. Make an amortization table and graph interest and principal payments.
Compute the accumulated value of an annuity immediate that makes semi-annual payments of £500 for 10 years and then it makes annual payments of £1000 for another 10 years.The annual effective rate is 4%.
If a loan P120, 000.00 is to be amortized for 2 years at 12.5% interest compounded monthly, how much is the monthly payment?
Joe secured a loan of $10,000 three years ago from a bank for use toward his college expenses. The bank charges interest at the rate of 3%/year compounded monthly on his loan. Now that he has graduated from college, Joe wishes to repay the loan by amortizing it through monthly payments over 13 years at the same interest rate. Find the size of the monthly payments he will be required to make.
2. Suppose that you take an add-on loan for $24,000 at an annual rate interest of 5.45% to be repaid in semi-annual (six-month) installments over two years. How much will semi-annual payments be? Use the close-end method.
Lucas purchases a 3,000 par value 12-year bond with 3% semiannual coupons for 2,760. He is able to reinvest his coupon payments at a nominal rate of 4% convertible semiannually. Calculate his nominal annual yield rate convertible semiannually over the 12-year period.
Joe and his partners have contracted to purchase the franchise rights, worth $66,000, to open and operate a specialty pizza restaurant called Pepperoni's. With a renewable agreement, the partners have agreed to make payments at the beginning of every three months for two years. To accommodate the renovation period, Pepperoni's corporate office has agreed to allow the payments to start in one year, with interest at 9.84% compounded annually. What is the amount of each payment? www The amount of each payment is s (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
A $5000 bond with a coupon rate of 6.25% and redeemable in two years was purchased when the yield rate was 7.75% compounded semi-annually. Construct the bond schedule showing the accumulation of discount.
Q. 4. If you sell your car to someone for OMR 9500 and agree to finance it at 15 % compounded monthth, how much should you receive each month to amortize the loan in 42 months? How much interest will you receive?
Ms. Rowel would like to buy a house costing $190000. She is required to make a down payment equalto 10% of the value of the house then borrow the balance from a bank that charges interest at an annualrate of 4.2% compounded monthly. The bank loan has to be paid o§ with equal monthly payments,(paid at the end of each month), in 30 years. Assume that she will get the loan at the beginning of amonth and start making monthly payments on the last day of each month until the loan is paid o§.

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