Christy takes out a four year loan from Bank A for $100,000 with annual repayments at the end of every year for 4 years. The annual effective interest rate is 2%. a) Write out the full amortization schedule with columns for payment, principle repaid, interest paid and outstanding loan balance for all four years. b) Suppose, at time 2 just after the second payment is made, the annual effective interest rate has risen to 6%. Bank A wishes to sell their right to the remaining payments to Bank B. What market price will they receive? (

Christy takes out a four year loan from Bank A for $100,000 with annual repayments at the end of every year for 4 years. The annual effective interest rate is 2%. a) Write out the full amortization schedule with columns for payment, principle repaid, interest paid and outstanding loan balance for all four years. b) Suppose, at time 2 just after the second payment is made, the annual effective interest rate has risen to 6%. Bank A wishes to sell their right to the remaining payments to Bank B. What market price will they receive? (

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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solve within 30 mins.
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Lead Time Sound Tek Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board assembly, final assembly, testing, and shipping. In the PC board assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of 50 printed circuit boards. Each board requires 4 minutes of board assembly time. After each batch is completed, the operator moves the assembled boards to the final assembly area. This move takes 11 minutes to complete. The final assembly for each stereo unit requires 22 minutes and is also done in batches of 50 units. A batch of 50 stereos is moved into the test building, which is across the street. The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 30…
Lead Time Sound Tek Inc. manufactures electronic stereo equipment. The manufacturing process includes printed circuit (PC) board assembly, final assembly, testing, and shipping. In the PC board assembly operation, a number of individuals are responsible for assembling electronic components into printed circuit boards. Each operator is responsible for soldering components according to a given set of instructions. Operators work on batches of 45 printed circuit boards. Each board requires 5 minutes of board assembly time. After each batch is completed, the operator moves the assembled boards to the final assembly area. This move takes 10 minutes to complete. The final assembly for each stereo unit requires 15 minutes and is also done in batches of 45 units. A batch of 45 stereos is moved into the test building, which is across the street. The move takes 20 minutes. Before conducting the test, the test equipment must be set up for the particular stereo model. The test setup requires 25…

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