An investment in consol bonds promises to provide an interest payment of $2.5 million a year in perpetuity. If the interest rate is 3.3%, what is the value of this investment?
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- What is the value of this investment on these financial accounting question?What is the value of this investment for these financial accounting question?Explain the nature of the potential lending losses associated with each of the following: default risk, liquidity risk, and maturity risk. What would you pay for an annuity paying $3,000 per year for 12 years if the interest rate is 10%?
- YTMYou make an investment into a money market account at time T=0. In year T=5, the value of the money market account will be $5,000. The money market account pays an annual interest of R=6%, and interest is compounded on a quarterly basis. What is the present value of this account?Your firm is considering two one-year loan options for a $506,000 loan. The first carries fees of 2.4% of the loan amount and charges interest of 3.6% of the loan amount. The other carries fees of 1.8% of the loan amount and charges interest of 4.7% of the loan amount. a. What is the net amount of funds from each loan? b. Based on the net amount of funds, what is the true interest rate of each loan?
- Assume annual mortgage payments of $12,000 for 30 years and an interest rate of 6.168% per year. What initial principal or PW will this repay?What is the yield to maturity on a simple loan for$1,500 that requires a repayment of $15,000 in fiveyears?2. Assume we have a $14,500,000 loan with a 2.25% interest rate, with an annual payment of $750,000. Calculate the number of years required to repay the loan.
- Which of the following statements is CORRECT? An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%. If a loan has a nominal annual rate of 8%, then the effective rate can never be greater than 8%. If a loan or investment has annual payments, then the effective, periodic, and nominal rates of interest will all be different. The present value of a 3-year, $150 annuity due will exceed the present value of a 3-year, $150 ordinary annuity.A one-year investment is certain to pay £650. If the annual interest rate is 6%. * Round your answer to the nearest pound. What is the present value of the payment on the day of the investment?Consider a GNMA mortgage pool with principal of $50 million. The maturity is 30 years with a monthly mortgage payment of 13 percent per annum. Assume no prepayments. a) What is the monthly mortgage payment (100 percent amortizing) on the pool of mortgages? b)If the GNMA insurance fee is 5 basis points and the servicing fee is 45 basis points, what is the yield on the GNMA pass‑through? c) What is the monthly payment on the GNMA in part (b)? d)Calculate the first monthly servicing fee paid to the originating FIs. e) Calculate the first monthly insurance fee paid to GNMA.
