1. Robert borrowed a certain sum of money from Joey on June 1, 1994 and signed a notepromising to pay him a total of P 20,000 at the end of 5 years. Joey sold this promissorynote to Peter on June 1, 1997. If Peter insists on discounting the note at 5% compoundedquarterly, what will he pay for the note?2. In this regard to the promissory note on Problem 1, Robert gets permission to delay hispayment until June 1, 2999, under the assumption that money is worth 5% compoundedquarterly after the note measures. What final payment is Robert required to make?

A promissory note is a financial instrument that is issued on a current date with a promise to pay a…

Answered: 1. Robert borrowed a certain sum of…

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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40) Jay Z earned $500,000 for a one-night singing gig in Macau, a zero-tax jurisdiction. He immediately wired those funds to Butterfield Bank in the British Virgin Islands as a three-year bank deposit. Mr. Z earns 7% on her money each year. What is the value of her deposit after three years? (42/19) a) $500,000 b) $507,000 c) $535,000 d) $572,450 e) $612,522
2. Ms. Fatima sold to Ms. Ruqaiya OMR 60,000 worth of goods on the 15th of April 2022 by accepting a 150 days, 6% interest bearing note. Both Ms. Fatima & Ms. Ruqaiya need your help in understanding how and in what way the notes receivable and the payables should be treated. Provide them with the required help by showing how the transactions would be treated in the books of both parties in the following situations: a) When the notes are accepted. b) On the maturity date, the note is honored. c) Suppose Ms. Fathima prepared final accounts on the 25th of July 2022 d) Following the above situation, the bill is met on maturity. e) The note was dishonored on the maturity date by Ms. Ruqaiya.
Donald bought a new hot tub today from Situation Hot Tubs. What is the present value of the cash flows associated with this transaction if the discount rate is 8.00 percent, he will receive a rebate of $608.00 from Situation Hot Tubs in 3 years, and he will pay $3,921.00 to Situation Hot Tubs in 5 years? Note: the correct answer is less than zero. O $-3151.22(plus or minus 10$) O $-2254.77(plus or minus 10$) O $-2060.57(plus or minus 10$) O $-2185.92(plus or minus 10$) O None of the above has plus or minus $10 to correct answer
14) Barkley Charles has a 4-year CD at Bank of the Bayou for $34,000.00 that earns 3.2% interest compounded monthly. Barkley's CD has a penalty of 8 months of interest. a. If Barkley leaves his money in the CD for the entire term of 4-years, determine the amount owed as a penalty. b. If Barkley leaves his money in the CD for the entire term of 4-years, determine and the amount of money he will receive.
Lily signed a personal loan for $7,500 with Joanne, her aunt, to pay her MBA tuition fees during the first year of her study. In the agreement, Lily promised to pay Joanne the principal plus 3.8% interest on this loan to compensate Joanne against the expected inflation on overall groceries and other costs Joanne has to cover per year based on the average rate of inflation observed in Canada since 1960 to 2021. Lily will start to make the first payment upon her graduation. a) Calculate the amount of annual interest for this loan. b) Calculate the amount of interest Lily saves if she pays back the loan six months upon graduating her MBA.
Roberto borrowed $10,000 dollars from the mafia guy down the block Guido Colombo at a rate of 30% on January 1st 2020. So, in January 1st 2022 two years later, Roberto paid Guido $ 5,000 dollars from that loan. Guido feel some sympathy, he lowered the rate from 30% to 18% percent. How much money will Roberto owe Guido Colombo as of January 2024
Mitt was injured by a bus called “Move Forward.” He won a lawsuit and will receive $10,000 per month, at the beginning of each month, for the next 10 years. How much must “Move Forward” deposit into an account earning 5%, compounded monthly, to satisfy this judgment?a. $946,742.b. $937,109.c. $942,814.d. $907,899.
Lisa deposits $80,000 into an account that pays 6% interest per year, compounded annually.Scott deposits $80,000 into an account that also pays 6% per year. But it is simple interest. Find the interest Lisa and Scott earn during each of the first three years.Then decide who earns more interest for each year. Assume there are no withdrawals and no additional deposits.
3
Nine months ago, Muriel agreed to pay Aisha $1,400 and $800 on dates 6 and 12 months, respectively, from the date of the agreement. With each payment Muriel agreed to pay interest at the rate of 7% from the date of the agreement. Muriel failed to make the first payment and now wishes to settle her obligations with a single payment four months from now. What payment should Aisha be willing to accept if money can earn 5 1/2 % ?
1 ) Suppose that Smith is currently age 16. Smith’s parents pay $25,000 for the right to provide Smith with payments of $K every two months, beginning two months after his 18th birthday and continuing indefinitely. Assume that the nominal annual interest rate is i (6) = 9% until Smith turns age 21, at which point the rate changes to i (6) = 24% thereafter. Find $K.
Bob has lost his job and had to move back in with his mother. She agreed to let Bob have his old room back on the condition that he pay her $250 rent per month, and an additional $1500 every other year to pay for her biannual jaunt to Florida. Since he is down on his luck, she will allow him to pay his rent at the end of the year. If inflation is 3% and Bob’s interest rate is 5%, how much is the present cost (in Year-1 dollars) for a 5-year contract with mom? (Note: Mom’s trips are in Years 2 and 4).

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