A small group of SAS1 students form an investment club in order to put their vast mathematics of finance knowledge to practical use. Their first business transaction is the purchase of a plot of land in Gauteng, which they believe is ideally located so as to benefit from industrial development. As the students are very short of cash, they negotiate a bond for 100% of the purchase price, namely R200 000. The bank is also willing to defer the start of repayment of the bond until the students have completed their studies in exactly 2 years time. The first bond repayment will therefore occur immediately upon completion of their studies, and will be at the rate of R4000 per month until the bond is repaid. If the bank charges an interest rate of 15% per annum payable monthly, find: (a) the number of full monthly payments necessary to repay the bond, and (b) the amount of any final reduced monthly payment needed to complete the repayment process.
A small group of SAS1 students form an investment club in order to put their vast mathematics of finance knowledge to practical use. Their first business transaction is the purchase of a plot of land in Gauteng, which they believe is ideally located so as to benefit from industrial development. As the students are very short of cash, they negotiate a bond for 100% of the purchase price, namely R200 000. The bank is also willing to defer the start of repayment of the bond until the students have completed their studies in exactly 2 years time. The first bond repayment will therefore occur immediately upon completion of their studies, and will be at the rate of R4000 per month until the bond is repaid. If the bank charges an interest rate of 15% per annum payable monthly, find: (a) the number of full monthly payments necessary to repay the bond, and (b) the amount of any final reduced monthly payment needed to complete the repayment process.
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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11.
A small group of SAS1 students form an investment club in order to put their vast
mathematics of finance knowledge to practical use.
Their first business transaction is the purchase of a plot of land in Gauteng, which
they believe is ideally located so as to benefit from industrial development. As the
students are very short of cash, they negotiate a bond for 100% of the purchase
price, namely R200 000.
The bank is also willing to defer the start of repayment of the bond until the
students have completed their studies in exactly 2 years time.
The first bond repayment will therefore occur immediately upoń completion of their
es, and will be at the rate of R4000 per month until the bond is repaid.
If the bank charges an interest rate of 15% per annum payable monthly, find:
(a) the number of full monthly payments necessary to repay the bond, and
(b) the amount of any final reduced monthly payment needed to complete the
гераyment prосess.
11:05
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2021/06/08
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