Option A: $5000 for 3 years at 8.5% per year, compounded semi-annually Method 1: Formula Method 2: TVM Calculator TVM Calculator Mode End OBeginning Present Value PV Payments PMT Future Value FV Annual Rate (%) Rate Periods Periods Compounding Option B: $5000 for 3 years at 7.9% per year, compounded monthly Method 1: Formula Method 2: TVM Calculator TVM Calculator Mode End OBeginning Present Value PV Payments PMT Future Value FV Annual Rate (%) Rate Periods Periods Compounding c) Which loan option should she take? Justify your answer.

Option A: $5000 for 3 years at 8.5% per year, compounded semi-annually Method 1: Formula Method 2: TVM Calculator TVM Calculator Mode End OBeginning Present Value PV Payments PMT Future Value FV Annual Rate (%) Rate Periods Periods Compounding Option B: $5000 for 3 years at 7.9% per year, compounded monthly Method 1: Formula Method 2: TVM Calculator TVM Calculator Mode End OBeginning Present Value PV Payments PMT Future Value FV Annual Rate (%) Rate Periods Periods Compounding c) Which loan option should she take? Justify your answer.

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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Economics A 30 year $100, 000 loan is made with effective annual interest i = 9% for the first 10 years and i = 7% for the next 20 years. The loan is paid off with constant yearly payments K beginning one year after the loan is made. Find K, and find the OB10 and OB25. Lastly, fill out the following amortization table for 3 years. t Payment Interest Principle Repaid Outstanding Balance 0 - - - $100, 000 12 3
A company has offered you two different payment plans for purchasing a product, • Option A. 15% down payment (of the total price) and 10 annual payments of $1,200.• Option B. No down payment and 12 annual payments of $ 1,500.Treat the down payment as occurring at Year 0. Assume an interest rate of 8% per year. a. What is the down payment of Option A?b. What is the price paid for the product under Option A?c. What is the price paid for the product under Option B?d. Which payment option should be selected, A or B?e. Briefly explain why someone might choose the option that has the larger sale price.
Present value with periodic rates Cooley Landscaping needs to borrow $32,000 for a new front-end dirt loader. The bank is willing to loan the money at 7.5% interest for the next 5 years with annual, semiannual, quarterly, or monthly payments. What are the different payments that Cooley Landscaping could choose for these different payment plans? CELOOD What is Cooley's payment for the loan at 7.5% interest for the next 5 years with annual payments? (Round to the nearest cent)
A 30 year, monthly payment ARM has the following characteristics: loan amount = $135,000, index value = 5.00%, margin = 2.50, discount points = 2, teaser rate = 6%. The payment for year one is: d $925.06 A. $943.94 B. $724.71 C. $809.39 D. $793.21
If you will have an amortization to buy house and lot, which plan will be the best? Explain comprehensively
If you could solve Option 2 with formulas that would be great! Option 2: Borrow $5,000,000 from a bank quoted an annual interest rate of 3.8%, do monthly payments during the payback period of 6 years. Find periodic and annual payments, also cumulative interest and cumulative principal.
Please use the information in Question 5 to answer this question. You have taken out a 1/1 ARM (the teaser rate is locked for 1 year, and after this 1-year initial period, interest rate begins to adjust per year) with the following loan terms: • Loan amount: $300,000 • Annual rate cap: 2% • Lifetime cap: 6% • Margin: 300 bps (3%) • Teaser rate (annual): 5% • Market index rate at the beginning of year 1: 5.5% • Market index rate at the beginning of year 2: 6.5% • Loan term in years: 30 years Q6: Please calculate the monthly payment for year 1 $1,703.37 O $2,306.74 O $1,264.81 $1,610.46 No answer within +/-$10.0 of the correct one
You need a 19000 loan option 1 a 30 year loan at apr of 7.5 option 2 a 15 year loan at apr of 6.5 what is the monthly payment for option 1 what is the monthly payment for option 2 what is the total payment of each which loan is better
3 GMG Studios plans to invest $55,000 at the end of each year for the next five years. There are three investment options available. Annual Rate Interest Compounded 2 points Option 1 Option 2 Option 3 5% 7% 10% Period Invested Annually 5 years Annually 5 years Annually 5 years eBook Print Required: Determine the accumulated investment amount by the end of the fifth year for each of the options. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.) Option 1 References Option 2 Option 3 Mc Graw Hill Accumulated Investment Amount Prev 3 of 5 Next > Check my work 3
Computing Present Value of Single Amount under Different Assumptions Consider the following four separate investment scenarios. Compute the present value under each of the four separate investment options. Note: Round final answer to the nearest whole dollar. Note: Do not use a negative sign (-) with your answers. Future Annual Investment Investment Amount Compounding Interest Rate Period (Years) Investment A $50,000 Annually 5% Semiannually 6% Quarterly 8% Monthly 12% Investment B 250,000 Investment C 300,000 Investment D 400.000 10 10 $ A A Present Value
Compare 180,00 mortage options both having fixed rates Option 1 30 year loan with 9 % APR what are the monthly payments what is the total amount paid for option 1 Option 2 180,000 mortage 15 year fixed APR 7.8 what are the total payments for option 2 how many payments for option 2
Assuming a discount rate of 6%, what is the future value of 100,000 per year for 12 years if the payments occur at the beginning of each period? Question 6 options: $1,619,514 $1,588,474 $1,686,994 $1,805,084 $1,788,214

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