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Essentials Of Investments
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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You borrow money on a self liquidating installment loan (equal payments at the end of each year, each payment is part principal part interest) Loan amount Interest Rate $211,000 15.3% Life 57 years Date of Loan January 1, 2023 Use the installment method - not straight line Do NOT round any interrmediate numbers. Do NOT turn this into a monthly problem. Do NOT put in minus signs, answer all positive numbers.
Transcribed Image Text:You borrow money on a self liquidating installment loan (equal payments at the end of each year, each payment is part principal part interest) Loan amount Interest Rate $211,000 15.3% Life 57 years Date of Loan January 1, 2023 Use the installment method - not straight line Do NOT round any interrmediate numbers. Do NOT turn this into a monthly problem. Do NOT put in minus signs, answer all positive numbers.
Redo the problem if the interest rate is 3% (for a well designed spreadsheet this should take 30 seconds) Required: 5. What is the annual payment (round to the nearest $)? $ 6. What are the total interest payments (round to the nearest $)? $ 7. After 23 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)? % 8. After 23 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)? %
Transcribed Image Text:Redo the problem if the interest rate is 3% (for a well designed spreadsheet this should take 30 seconds) Required: 5. What is the annual payment (round to the nearest $)? $ 6. What are the total interest payments (round to the nearest $)? $ 7. After 23 payments have been made, what percentage of the total interest has been paid (round to the nearest percentage point)? % 8. After 23 payments have been made, what percentage of the total principal has been paid (round to the nearest percentage point)? %
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