Consider a loan of Sh. 50,000 with a 30 year term, interest of 6% (i + p) payable monthly. The loan balance is adjusted for inflation at the beginning of every 2 years based on the CPI. The CPI increase at end of year two is 5%. Compute the new loan balance at the end of year two.

Consider a loan of Sh. 50,000 with a 30 year term, interest of 6% (i + p) payable monthly. The loan balance is adjusted for inflation at the beginning of every 2 years based on the CPI. The CPI increase at end of year two is 5%. Compute the new loan balance at the end of year two.

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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Ross Land has a loan of $8,500 compounded quarterly for four years at 4%. What is the effective interest rate for the loan? Click here to view page 1 of the future value table. Click here to view page 2 of the future value table. The effective interest rate is %. (Round to two decimal places as needed.)
A loan of $1500 is to be repaid by annual payments of $250 to commence at the end of the fifth year and to continue thereafter for as long as necessary. Find the amount of the final payment, if the final payment is to be larger than the regular payments. Assume i = 5%. Round your answer to two decimal places.
A loan of 25,000 is being repaid with annual payments of 2,243 at the end of the year. The interest rate on the loan 7.5%. Calculate the interest in the 5th payment (rounded to nearest tens).
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A loan in the amount of 300,000 is repaid with 20 end of year payments containing equal principal. The annual effective interest rate isi, and the total interest paid during the life of the loan is 250,000 . Just after the 10 th payment is made, the loan is renegotiated. There will now be 10 end of year payments ofXwith the annual effective interest rate remaining ati. Find the outstanding loan balance just after the 11th payment.
A basic ARM is made for $217,000 at an initial interest rate of 6 percent for 30 years with an annual reset date. The borrower believes that the interest rate at the beginning of year (BOY) 2 will increase to 7 percent. Required: a. Assuming that a fully amortizing loan is made, what will the monthly payments be during year 1? b. Based on (a) what will the loan balance be at the end of year (EOY) 1? c. Given that the interest rate is expected to be 7 percent at the beginning of year 2, what will the monthly payments be during year 2? d. What will be the loan balance at the EOY 2? e. What would be the monthly payments in year 1 if they are to be interest only?
a demand loan of $3000 is repaid by payments of $1500 after two years, $1500 after four years, and a final payment after six years. interest is 7% compounded quarterly for the first two years, 8% compounded annually for the next two years, and 8% compounded quarterly thereafter. what is the size of the final payment?
Consider a student loan of $10,000 at a fixed APR of 6% for 4 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.)

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