QUESTION 5 (a) RM 200 is invested every month for 2 years 7 months at 10 % compounded monthly. What is the future value of this annuity at the end of the investment period? (b) Mr Lim must pay RM 250 every month for 24 months to settle a loan at 10% compounded monthly. Find i. ii. The original value of the loan The total interest he must pay

QUESTION 5 (a) RM 200 is invested every month for 2 years 7 months at 10 % compounded monthly. What is the future value of this annuity at the end of the investment period? (b) Mr Lim must pay RM 250 every month for 24 months to settle a loan at 10% compounded monthly. Find i. ii. The original value of the loan The total interest he must pay

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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2a) Consider a 4-year loan of $5,000 which you will pay back in 4 equal annual payments. If the loan has an 8% annual interest rate over the 4-year period, what would the size of each payment be? 2b) Of the payment you calculated for the first part of this question, how much of that payment would be the interest for the second payment and how much of that payment would be principal repayment for the loan?
QUESTION SIX a) Find the Future Value of an annuity for$1000 paid at the end of each year for 3 years assuming interest is compounded annually at 7%? b) Julie Miller will receive the set of cash flows below. What is the Present Value at a discount rate of 10%. Year one 500, year two 500, year three 300, year four 300 and year five 150. c) Perpetuity has no time limit. The present value of $100 perpetuity discounted at 15% is?
Question 2 Assuming you only make the required monthly payments, how much will you still owe on 30 year mortgage at the end of 139 months. Assume an initial principal amount of 525,587 and an APR of 3% with monthly compounding.
Ay 2. Find the rate of interest i such that a 20-year annuity with payments at the end of each year has the accumulated value which is exactly three times as much as the accumulated value of a 10-year annuity with payments at the end of each year.
Question 2 Suppose that the parents of a young child decide to make semi-annual deposits into a savings account, with the first deposit being made on the child's 5thbirthday and the least deposit being made on the 15th birthday. Then starting on the child's 18th birthday, withdrawals of P 5,000 and an increasing of 10% every semi-annual will be made until his 21stbirthday. If the nominal interest rate is 15% compounded quarterly, what are the semiannual deposits. (Hint: Be careful in counting n-periods) Use the editor to format your answer
Question 3 (1 point) An investment is expected to result in equal payments of $ 14300.00 at the end of each semi-annual period for the next 6 years (ordinary annuity). Compounding: 2 times per year. If the appropriate required rate of return (discount rate) is 12 %, what is the present value of the annuity stream?
Question 4 What's the present value of a $830 annuity payment over six years if interest rates are 10 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Futre value
a. Use the appropriate formula to find the value of the annuity b.how much of the financial goal comes from deposit and how much comes from interest? periodic deposit-$? at the end of the month Rate-5% compounded monthly Time-16 years Financial goal-$140,000
Question 2 What is the future value of a $810 annuity payment over four years if interest rates are 8 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future Value?
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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