Abigail has just signed a 7-year lease for her new business. The full annuallease amount is due at the beginning of every year and such cash flowshave been agreed to be 21,085 dollars now and the subsequentpayments to increase by 4% per year until maturity. Given that theprevailing average market interest rate is 6% per year compoundedmonthly, compute the present value of this financial asset. (note: roundyour answer to the nearest cent and do not include spaces, currencysigns, or commas)

In the given question, payments will be made in the beginning of each year for next 7 years.…

Answered: Abigail has just signed a 7-year lease…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What would be the sum of all the payments made (i.e., total $s paid over the 30 years, ignoring time value) on the following house mortgage? Loan amount is $175,000 with an interest rate of 6.4% per annum, term of 30 years, and monthly payments. (Round to nearest penny and enter, for example, as 123456.78) Answer:
Suppose that four years ago you took out a Canadian mortgage for $683,000at an APR of 3.37% with monthly payments to be amortized over 25 years. You have been paying$3363.32 per month. Today, you have the opportunity to refinance your mortgage at 1.98% for your monthly payments for the remaining 21 years. (a) Calculate the e§ective monthly interest rate and the remaining balance of the loan outstanding when 21 years remain to the loan. (b) Find the new e§ective monthly interest rate if you decide to refinance at 1.98%. How much would your new monthly payment be?
1. You buy a property for $170,000 down and monthly payments of $10, 450 for 5 years. What is the cash price paid if the mortgage is 7.75% compounded semi- annually? 2. How much needs to be invested today at 4.8% compounded semi-annually to provide monthly payments of $500 in perpetuity starting one month from today. NEED ANSWERS ASAP. EVEN WITH NO SOLUTION
Consider a home mortgage of $125,000 at a fixed APR of 4.5% for 25 years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest. ..... a. The monthly payment is $ (Do not round until the final answer. Then round to the nearest cent as needed.)
Imagine you get a $450,000 closed floating rate mortgage (no CMHC needed) having a three-year term and amortized over 25 years. Although the interest rate on the mortgage would change, your monthly payments would remain fixed for the term. Monthly payments would be calculated based on APR of %4.8 compounded monthly and amortization period of 25 years. The actual amount of the interest accrued will be deducted from your fixed monthly payments and the rest would be used for principal repayment. Now, assume that the floating rate itself is 4.2% for the first 6 months, then suddenly jumps to 6% for the next 12 months, then drops to 3.6% for the next 6 months, and then declines to 3% for the final 12 months. Note that all rates are quoted as an APR and compounded monthly. Part A: How much money do you owe (i.e. what is the outstanding balance) after 18 months? Part B: How much interest did you pay over the term of the mortgage? How much was principal?
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1
Consider a home mortgage of $225,000 at a fixed APR of 6% for 30 years. a. Calculate the monthly payment. b. Determine the total amount paid over the term of the loan. c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest. a. The monthly payment is $ (Do not round until the final answer. Then round to the nearest cent as needed.) b. The total amount paid over the term of the loan is $ (Round to the nearest cent as needed.) c. Of the total amount paid,% is paid toward the principal, and % is paid for interest. (Round to one decimal place as needed.)
Subject: Financial strategy & policy 1) A leasing contract calls for an immediate payment of $100,000 and nine subsequent $100,000 semiannual payments at six month intervals. What is the PV of these payments if the annual discount rate is 8 percent? 2) Siegefried Basset is 65 years of age and has a life expectancy of 12 more years. He wishes to invest $20,000 in an annuity that will make a level payment at the end of each year until his death. If the interest rate is 8 percent, what income can Mr. Basset to receive each year?
A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The loan will be $238,000 at 6 percent interest for 20 years. Required: a. hat would be the maturity period if payments are bi-weekly? How much will the borrower pay in total under each payment option? Which choice would be less costly to the borrower? Hint: Assume 26 total bi-weekly payments per year for the maturity period. b. Assume that the bi-weekly loan was available for 5.75%. What would be the maturity period if payments are bi-weekly? How much will the borrower pay in total under each payment option? Which choice would be less costly for the borrower? Complete this question by entering your answers in the tabs below. Required A Required B hat would be the maturity period if payments are bi-weekly? How much will the borrower pay in total option? Which choice would be less costly to the borrower? Hint: Assume 26 total bi-weekly payments maturity period. Note: (Do not round intermediate…
You take out a 30-year mortgage (360 months) with a face value of $200,000 and a stated annual rate of 6.0 percent. As you can calculate, your required monthly payment is $1.199.10. However, with each payment, you send your lender an extra $250.00, which directly reduces the mortgage balance each month. What is the mortgage balance after 42 months? Enter your answer to the nearest cent, with no punctuation other than a decimal. For example, if your answer is $28,542.19, enter "28542.19". Note that Canvas will delete trailing zeros, if entered.
Consider a 4-year amortizing loan. You borrow $2,400 initially and repay it in four equal annual year-end payments. a. If the interest rate is 10%, what is the annual payment? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Annual payment $ ✓Answer is complete and correct. Time b. Prepare an amortization schedule. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Leave no cells blank - be certain to enter "0" wherever required. 1 2 3 4 Loan Balance (S) 2,400.00 2,400.00 757.13 1,882.87 x 1,314.03 688 Answer is complete but not entirely correct. Year-End Interest Due on Loan Balance (5) 240.00 188.29 131.40 68.83 Total Year- End Payment ($) 10 757.13 757.13 757.13 757.13 Amortization of Loan (S) 0 517.13 568.84 625.73 688.30

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