Doris Wade purchased a condominium for $50,000 in 1988. Her down payment was $26,000. She financed the remaining amount as a $24,000, 30-year mortgage at 9%, compounded monthly. Her monthlypayments are $190. It is now 2003 (15 years later) and Doris has sold the condominium for $90,000, immediately after making her 180th payment on the unit. Find her effective annual internal rate of return onthis investment.Choose the closest answer below.OA. 5.2%O B. 9%O C. 1.6%OD. 3.8%

Internal rate of return is used to assess a project's or investment's prospective profitability. It…

Answered: Doris Wade purchased a condominium for…

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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The Benefit of a Higher APY Isabel Lopez from Lewiston, Idaho, who is 19 years old, recently received an inheritance of $49,000 from her grandmother's estate. She plans to use the money for the down payment on a home in ten years when she finishes her education. Right now the funds are in a savings account paying 4.0 percent APY. How much would Isabel have in ten years if instead she purchased a ten-year CD paying 6.0 percent? Round your answer to the nearest dollar. (Hint: Use Appendix A-1 or visit the Garman/Forgue companion website.) Round Future Value of a Single Amount in intermediate calculations to four decimal places.
Jen purchased a condo in Naples, Florida, for $699,000. She put 20% down and financed the rest at 5% for 35 years. What are Jen’s total cost of interest? Multiple Choice $457,425.60 $626,863.20 $626,128.20 $978,600
1. Jose Garcia's life long dream is to own a fishing boat to use in his retirement. Jose has recently come into an in heritance of $400,000. He estimates that the boat he wants will cost $300,000 when he retires in 5 years. How much of his in heritance must he invest at an annual rate of 8% compounded annually) to buy the boat at retirement? 2. Refer to the data in BE6.7. Assuming quarterly compounding of amounts invested at 8%, how much of Jose Garcia's in heritance must be invested to have enough at retirement to buy the boat?
You purchased your home in 1992 for $345,000 and sold the house in 2022 for $1,050,000. What was your rate of return? Question 14 options: 3.40% 4.16% 3.06% 3.78%.
6. Jake and Archie are looking for places to live. Jake decides to rent a house for $1400 . Archie buys a house for $189 900, with a down payment of 10%. The bank has offered Archie a 20-year mortgage for the remainder of the cost, at 4% compounded semi-annually, with payments every two weeks. Jake and Archie both move after 5 years. Archie's house has depreciated by 2% per year. Compare Jake's and Archie's housing costs. per month.
Joe is buying some kitchen equipment for his new apartment. The total cost is $ 3,800$3,800 and he places a down payment of $380 There is add-on interest of 10% What is the total amount to be repaid if he takes 4 years to pay for the purchase? Round the answer to the nearest cent. A.)3762.00 B.)4788.00 C.)140220.00 D.)None of the above is correct.
50. If John purchases a new car for $18,500 and, according to research, itstraight line depreciates to zero value after 10 years, how much will his car beworth after 99 months? A. $0B. $3,237.50C. $186.87D. $3,150.25
Ff.236.
Dick Hercher bought a home in Homewood, Illinois, for $230,00O. He put down 20% and obtained a mortgage for 25 years at 8%. The total interest cost of the loan is: Multiple Choice $327,372.80 None of these $184,000.00 $242,144.00 $242,411.00 acer
Dick Hercher bought a home in Homewood, Illinois, for $230,000. He put down 20% and obtained a mortgage for 25 years at 8%. The total interest cost of the loan is: Multiple Choice $368,000 $327,372.80 $302,554 $242,042
Three (3) years ago Sean purchased his home worth $575,000. It is now worth $650,000 due to the crazy increase in the housing market. When Sean purchased his home, he made the minimum required for a conventional mortgage. Since then, he has paid S$30,000 down on his original mortgage. He is now ready to undertake some major renovations to his home and his bank is willing to provide him with a Home Equity Life of Credit (HELOC) for 80% on the current market value less his outstanding mortgage balance. What is the amount of credit that the bank is willing to provide Sean under a HELOC? A $65,000 B. $50,000 $75,000 $30,000 $90,000
QUESTION 9 Bob buys a property that costs $1,000,000. The property is projected to generate NOI as follows: Year NOI $100,000 1 2 $105,000 3 $110,000 Bob will own the property for two years. Bob will sell the property at the end of year 2 at a cap rate that is 250 basis points lower than the cap rate at which he bought the property. What is Bob's annualized IRR for the investment in question A. 26.21% B. 30.47% C. 27.78% D. 14.89%

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