Q 11. (5) You borrow $6,145 now and agree to pay the loan off over the next ten years in ten equal annual payments, which include principal and 10% annually compounded interest on the unpaid balance. What will your annual payment be? What is the remaining balance after 5 Years?

Q 11. (5) You borrow $6,145 now and agree to pay the loan off over the next ten years in ten equal annual payments, which include principal and 10% annually compounded interest on the unpaid balance. What will your annual payment be? What is the remaining balance after 5 Years?

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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Q 11. (5) You borrow $6,145 now and agree to pay the loan off over the next ten years in ten equal
annual payments, which include principal and 10% annually compounded interest on the unpaid
balance. What will your annual payment be? What is the remaining balance after 5 Years?

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9. I wish to borrow $400,000 to buy a house. If the current interest rate on the loan is 4.8% per annum, then my monthly repayment at the end of every month for the next 30 years is: Select one: a. $2,908.66 b. $2,098.66 c. $2,090.30 d. $1,111.11
Problem 6 What is the annual equal amount of money you have to set aside to guarantee yourself an annual income to perpetuity of $15,000 starting in 41 years from now? You make the first payment in three years from now and the last payment in 40 years. Assume an interest rate of 7% (EAR).
16. a. What do understand by 'amortization‘?b. Against a house, mortgage loan is obtained for Rs. 10,00,000 for 15 years and at annual interest of 12%. What is the annual payment?
8. Suppose that you want to take a five-year loan of $80,000. The interest rate is 9% per year, and the loan calls for equal annual payments. How much do you need to pay each year? A. $17,120.1 B. $19,169.4 C. $20,567.4 D. $21,333.1
4f
13Assume you plan to borrow $400,000 from your bank to buy a home. The bank offers: • a 5-year fixed rate of 6.05%, compounded monthly. • a 3-year fixed rate of 5.75%, compounded monthly. If you choose to repay the borrowing in equal installments monthly over a 20 years, what would be the difference between your monthly payments at the two different APRs? a. $89.32 b. $68.94 c. $26.98 d. $154.58 14You expect that the interest rate will decrease in the near future, therefore you eventually choose the 3-year fixed rate. Then, what will be your mortgage balance after 3 years? a. $321,598.59 b. $452,321.21 c. $365,056.12 d. $379,325.89 15Three years passed, it's time to renew your mortgage. Upon your renewal, your bank is now offering a new 3-year fixed rate of 4.5%, what would be your monthly repayment amount after renewal? a. 2825.32 b. 2598.54 c. 1965.21 d. 2563.60
1.5 Suppose you would like to retire in 15 years. To save for retirement, you deposit an amount A into the bank at the beginning of the next 180 months. After that period, you would like to withdraw $1,000 at the beginning of the following 300 months. Assume a nominal yearly rate of 7.5% compounded monthly. What amount does A have to be?
Problem #4: A perpetuity pays $3400 at the end of every month for 11 months of each year. At the end of the 12th month of each year, it pays double that amount. If the effective ANNUAL rate is 10.7%, what is the present value of this perpetual annuity?
Question 4 What's the present value of a $830 annuity payment over six years if interest rates are 10 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Futre value
Question 4 You deposit $500 each month into an account earning 7% interest compounded monthly. a) How much will you have in the account in 20 years? b) How much total money will you put into the account? c) How much total interest will you earn?
QUESTION 5 What is the present value of an annuity (to nearest dollar) that will give you 25 payments of $1,000 and the first payment is in one year from today? Assume an interest rate of 10 percent. O 9169 O 8981 O 8421 O 9077 O 8514

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