John borrows $50,000 at an annual effective rate of 6% and will make payments 3. at the end of each year. The first 15 paymnets are level payments of $4,000. Starting with the 16th payment, the payments will decrease by 4% from the previous payment. The final payment will be a drop payment that will completly pay off the loan. Find the ballance on the loan after the 10th payment.

John borrows $50,000 at an annual effective rate of 6% and will make payments 3. at the end of each year. The first 15 paymnets are level payments of $4,000. Starting with the 16th payment, the payments will decrease by 4% from the previous payment. The final payment will be a drop payment that will completly pay off the loan. Find the ballance on the loan after the 10th payment.

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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A house costs $147,000. It is to be paid off in exactly ten years, with monthly payments of $1,783.52. What is the APR of this loan? A. 6% B. 8% C. 7% D. 9% Please use BA II where applicable.
Tedros borrowed $2 million and planned to repay the loan by making equal month-end payments over a period of 10 years. The interest rate on the loan is 6%, compounded monthly. 1. (3) Calculate the amount of monthly payment. 2. (b) Of the 60th payment, how much will be used to repay the interest and principal for the month? 3. (e) Tedros plans to pay off the loan immediately after making the 60th payment. What should the size of the lump-sum (pre-)payment be? (2 marks) 4. (d) Immediately after the 60th repayment, the central bank increased the market interest rate and the bank subsequently raised the loan's interest rate to 8% p.a., compounded monthly. If Tedros decides to keep the number of remaining payments unchanged, what is the size of the new monthly repayments?. 5. (e) Calculate the total amount of principal repaid and interest paid in the first 60 monthly payments. Assume that the relevant interest rate is still 6%, compounded monthly (that is, not 8%). [Hint: One make-sense way…
Tedros borrowed $2 million and planned to repay the loan by making equal month-end payments over a period of 10 years. The interest rate on the loan is 6%, compounded monthly. (a) Calculate the amount of monthly payment. (b) Of the 60t payment, how much will be used to repay the interest and principal for the month? (c) Tedros plans to pay off the loan immediately after making the 60th payment. What should the size of the lump-sum (pre-)payment be? (d) Immediately after the 60th repayment, the central bank increased the market interest rate and the bank subsequently raised the loan's interest rate to 8% p.a., compounded monthly. If Tedros decides to keep the number of remaining payments unchanged, what is the size of the new monthly repayments? (e) Calculate the total amount of principal repaid and interest paid in the first 60 monthly payments. Assume that the relevant interest rate is still 6%, compounded monthly (that is, not 8%). [Hint: One make-sense way to think about this is by…
You deposit $78000 into an account that pays 5% compounded quarterly. You leave the money in the account for 5 years. At the end of the 5 years, you plan to immediately start making quarterly withdrawals. what size withdrawals can you make if you only have 20 times to withdraw?
Jean takes out a loan to be repaid in 120 monthly payments of $3,000 each, the first payment being due one month after the date of the loan. The nominal annual interest rate is 6%, convertible monthly. Immediately after making the 60th payment, Jean negotiates to pay the bank a lump sum of $150,000 to pay off the loan. Determine the effective annual yield to the lender over the life of the loan. Possible Answers A <5.0% B ≥ 5.0% but <5.3% c≥5.3% but < 5.6% D 25.6% but < 5.9% E ≥5.9%
You have taken out a 20-year loan of $72,000 with 3% interest (APR) compounded monthly and with monthly payments. Calculate the amount of your second principal payment. Round your final answer to one decimal place.
You have taken out a 60-month, $26,000 car loan with an APR of 8%, compounded monthly. The monthly payment on the loan is $527.19. Assume that right after you make your 50th payment, the balance of the loan is $5,083.64. How much of your next payment goes toward principal and how much goes toward interest? Compare this with the prinicipal and interest paid in the first month's payment. (Note: Be careful not to round any intermediate steps less than six decimal places.) The amount that goes towards interest is $. (Round to the nearest cent.) C
You deposit $27,000.00 in an account that pays 4% compounded annually and immediately start making with withdraws each year for the next 2 years. How much can you withdraw each year?
Miller borrows $370,000 to be paid off in four years. The loan payments are semiannual with the first payment due in six months, and interest is at 8%. What is the amount of each payment? Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, and PVA of $1). Multiple Choice О $62,451 О $118,400 $122,549 О $54,955
You initially invest $5, 000 into an account, and at the end of the first year, invest another $5, 000. At the end of the third and fourth year you withdraw X from the account. For any withdrawal, there is penalty of 1% on the amount withdrawn. Find X if the account has $10, 000 in it at the end of the fifth year, and the account earns an effective annual interest rate of 7% for the the entire five years.
You deposit $35,000.00 in an account that pays 6% compounded quarterly and immediately start making with withdraws each quarter for the next 3 years. How much can you withdraw each quarter?
David went to the bank and opened a 54 month CD compounded monthly with an APR of 4.22%. He deposits $4,200 into the CD. What will be the value of the CD when it comes to term? How much interest will the CD earn? What is the total percent increase?

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