Question 19 ( You are offered two investments as follows. If you have limited budget, which one do you choose? You may round up the final answer to a whole number. Options A B Annual Payment $600 $400 Number of Years 12 Unlimited B You are indifferent between A and B. A O A and B. Annual Interest Rate 10.45% 10%

Question 19 ( You are offered two investments as follows. If you have limited budget, which one do you choose? You may round up the final answer to a whole number. Options A B Annual Payment $600 $400 Number of Years 12 Unlimited B You are indifferent between A and B. A O A and B. Annual Interest Rate 10.45% 10%

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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QUESTION 12 A borrower is purchasing a property for $250,000 and can choose between two possible loan alternatives. The first is a 90% loan for 30 years at 8.5% interest and the second is a 80% loan for 30 years at 8.25% interest. Assuming the loan will be held to maturity, what is the incremental cost of borrowing the extra money? 10.43% 12.45% 13.50% O 10.05%
MATTILMATICAL ASSOCIATION OF AMERICA ple and Compound Interest / 12 Previous Problem Problem List Next Problem HW 20 Simple and Compound Interest: Problem 12 (2 points) In 6 months, Alex will need $1,530.00 to pay her college tuition. How much does she need to invest today into an account earning an an interest rate of 6.392% compounded monthly, so that she has enough money to pay her tuition? The amount Alex needs to invest is (Note: Your answers should include a dollar sign and be accurate to two decimal places) Preview My Answers Submit Answers You have attempted this problem 0 times. You have unlimited attempts remaining. Page generated at 05/04/2024 at 02:42pm EDT WeBWorK 1896-2022 theme: math4-green | ww.version: 2.171pgersion 2.17 The WaßWork Project
Question 5 of 10 You plan to save money for a down payment of $44,000 to purchase an apartment. You can only afford to save $1,250 at the end of every quarter into an account that earns interest at 3.92% compounded annually. How long will it take you to save the planned amount? years months Express the answer in years and months, rounded to the next payment period SUBMIT QUESTION ↑
ple and Compound Interest 4 Previous Problem Problem List Next Problem HW 20 Simple and Compound Interest: Problem 4 5 points) Consider a $6500 T-bill calculated as a simple discount loan. The annual simple discount rate is 2.9% and the length is set to be 3 years. Find the price of the T-bill, the interest earned, and the simple interest rate paid on the bill. Price of the T-bill= dollars. Total interest earned when $6500 T-bill is redeemed= dollars. Simple interest rate earned = percent (round to 2 decimal places). Note: You can earn partial credit on this problem. Preview My Answers Submit Answers You have attempted this problem 0 times. You have unlimited attempts remaining, Page generated at 05/04/2024 at 02:47pm EDT WebWork 1996-2022 theme mathd-green ww.version: 2.171pgxersion 2.17 The WeWork Project
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32 points You decide to get ahead and start saving for your first condo after college. You estimate your dream condo is going to be $250,000 in 5 years once you graduate and get your job. You decide to put in annual payments on January 1st of every year into an investment account that pays 7.5% interest. How much will your annual payments need to be so you can pay for your condo in cash? (Round to the nearest dollar) $40038 $39.59096 $43041 $42,904
C Question 10 Assume that you have just purchased an investment at Year O that will give you payments of $100 in each of Years 1 through infinity (a perpetuity), and an additional $200 in each of Years 10 through infinity (a second perpetuity), and an additional $300 in each of Years 20 through infinity (a third perpetuity). Also assume that the appropriate nominal, annual discount rate is 9 percent. Given this information, determine the maximum that you should have been willing to pay for this investment. O $3,563.20 O $3,953.51 O $392.27 O $2,782.58 O $3,172.89
QUESTION 3 Suppose you deposit $2.500 in a CD paying 8% interest, compounded every other month. How much will you have in the account after 15 years? Round your answer to the nearest cent. below is an example how to do problem mple 4 A certificate of deposit (CD) is a savings instrument that many banks offer. It usually gives a higher interest rate, but you cannot access your investment for a specified length of ime. Suppose you deposit $3000 in a CD paying 6% interest, compounded monthly. How much will you have in the accbunt after 20 years? In this example, Pa-$3000 1=0.06 -12 the initial deposit 6% annual rate 12 months in 1 year since we're looking for how much well have after 20 N=20 years 0.06 So P 3000 1+ 12 3D%2993061(round your answer to the nearest penny) %3D Let us compare the amount of money earned from compounding against the amount you would carn from simple interest Yars Simple Interest 6% compounded (S15 per month)monthly 0.5% each month 33900 $4800 $5700 $4046 55…
Question 21 Suppose you want to buy a $147,000 home. You found a bank that offers a 30-year loan at 3.3% APR. What will be your monthly payment? (Round to the nearest cent.) How much would you end up paying the bank for the home after 30 years? (Round to the nearest cent.) $ Suppose you wanted to reduce the time of your loan to 25 years. What would be your new monthly payment? (Round to the nearest cent.) $ How much would you end up paying the bank for the home after 25 years? (Round to the nearest cent.) $ How much did you save by reducing the time of your mortgage loan? (Round to the nearest cent.) $
3 How much is accumulated in each of the following savings plans over X years? X= Y= Z= A= 1 years 30 $ 20 $ 24% $Y deposited at the end of each month at A% compounded monthly Try Again $Z deposited at the end of the first month, $Z+1 at the end of the second month, and so forth, increasing by $1 per month, at A% compounded monthly. Try Again
mple and Compound Interest / 9 Previous Problem Problem List Next Problem HW 20 Simple and Compound Interest: Problem 9 (6 points) Addie invests 24900 dollars at an interest rate of 9 percent. Determine the value of the investment at the end of 5 years using each of the different compounding methods listed below. Round each answer to the nearest cent (two decimal places). (a) Suppose interest is compounded annually. Then, after 5 years, Addie will have a total of $ (b) Suppose interest is compounded semiannually. Then, after 5 years, Addie will have a total of $ (c) Suppose interest is compounded monthly. Then, after 5 years, Addie will have a total of $ (d) Suppose interest is compounded daily (using 365 days in a year). Then, after 5 years, Addie will have a total of $ Note: You can earn partial credit on this problem. Preview My Answers Submit Answers You have attempted this problem 0 times. You have unlimited attempts remaining. Page generated at 05/04/2024 at 02:45pm EDT WeBWorK…
tion □ [myUT 1 ovide your answer below: N Module 2.5: Understanding ALT Courses CURRENT OBJECTIVE Calculate the monthly payment and interest cost for a mortgage Question A mutual fund manager wishes to purchase a property that's been valued at $1.5 m. She has $200,000 in cash to use as a deposit, and she will require a mortgage for the rest. The annual interest rate on the loan is 2.45% and the loan is for 25 years. Calculate the monthly payments. Round your answer to the nearest cent. Do NOT round until you have calculated the final answer. X C knewton.com V B Module 2.5: Understanding & in N FEEDBACK 3 V- Content ALT MORE INSTRUCTION A + 2.1 FN 88 11 SUB SHIFT 4

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