Mary wants to buy a new car but needs money for the down payment. Herparents agree to lend her money at an annual rate of 5%, charged as simpleinterest. They lend her s7000 for 3 years. She makes no payments except theone at the end of that time.Answer the following questions. If necessary, refer to the list of financial formulas.(a) How much total interest will Mary have to pay?(b) What will the total repayment amount be (including interest)?

Simple interest is plain simple and there is no interest on interest and so there is no compounding…

рауm parents agree to lend her money at an annual rate of 5%, charged as sir interest. They lend her s7000 for 3 years. She makes no payments except one at the end of that time. Answer the following questions. If necessary, refer to the list of financial formul |(a) How much total interest will Mary have to pay? |(b) What will the total repayment amount be (including interest)?

рауm parents agree to lend her money at an annual rate of 5%, charged as sir interest. They lend her s7000 for 3 years. She makes no payments except one at the end of that time. Answer the following questions. If necessary, refer to the list of financial formul |(a) How much total interest will Mary have to pay? |(b) What will the total repayment amount be (including interest)?

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

See similar textbooks

Similar questions

9. Jason bought a home in Arlington, Texas, for $127,000. He put down 25% and obtained a mortgage for 30 years at 6%. a. What is Jason’s monthly payment? (Do not round intermediate calculations. Round your answer to the nearest cent.) Monthly payment $ b. What is the total interest cost of the loan? (Use the amortization worksheet on the financial calculator.) Total interest cost $
Financial contracts involving investments, mortgages, loans, and so on are based on either a fixed or a variable interest rate. Assume that fixed interest rates are used throughout this question. Zoe deposited $900 in a savings account at her bank. Her account will earn an annual simple interest rate of 7%. If she makes no additional deposits or withdrawals, how much money will she have in her account in 13 years? O $967.41 $2,168.86 O $163.00 O $1,719.00 Now, assume that Zoe's savings institution modifies the terms of her account and agrees to pay 7% in compound interest on her $900 balance. All other things being equal, how much money will Zoe have in her account in 13 years? O $1,719.00 O $963.00 O $2,168.86 O $151.82
Emily receives R1 500,00 from the bank now that charge 10,5% simple discount per annum. She has to pay back the bank as amount of R1 893,75 in a few months' time. The number of months after which Emily pays back the loan, rounded to one decimal place, is O a. 23,8. O b. 2,5. C. 2,0. O d. 30,0.
Anthony planned to buy a house but could afford to pay only $9,000 at the end of every 6 months for a mortgage with an interest rate of 5.70% compounded semi-annually for 25 years. She paid $30,000 as a down payment. a. What was the maximum amount she could afford to pay for a house? b. What was her total amount spent for the house through the mortgage period including the down payment (not taking the time-value of money into account)? c. What was the total amount of interest paid through the mortgage period?
2. Simple versus compound interest Financial contracts involving investments, mortgages, loans, and so on are based on either a fixed or a variable interest rate. Assume that fixed interest rates are used throughout this question. Heather deposited $1,700 at her local credit union in a savings account at the rate of 9.8% paid as simple interest. She will earn interest once a year for the next 13 years. If she were to make no additional deposits or withdrawals, how much money would the credit union owe Heather in 13 years? O $3,865.80 O $5,731.65 O $1,882.93 O $266.60 Now, assume that Heather's credit union pays a compound interest rate of 9.8% compounded annually. All other things being equal, how much will Heather have in her account after 13 years? O $5,731.65 O $561.70 $1,866.60 O $3,865.80
Alexei finances her purchase of a $900 television. Her one-year loan has a fixed annual interest rate of 2.5%. Which equation correctly calculates Alexei's monthly payment? 12.0.025 М — -12-1 900 1-(1+ ) 0.025 900-0.025 M -12.1 12 12 1- (1+ 0.025 900.0.025 M = -12-1 0.025 12 1-(1+ 12 12.0.025 M -12.1 900 1- 12 1+ 0.025
Linda borrowed money from a bank to buy a fishing boat. She took out a personal, amortized loan for $13,500, at an interest rate of 4.35%, with monthly payments for a term of 4 years. For each part, do not round any intermediate computations and round your final answers to the nearest cent. If necessary, refer to the list of financial formulas. (a) Find Linda's monthly payment. S (b) If Linda pays the monthly payment each month for the full term, find her total amount to repay the loan. s (c) If Linda pays the monthly payment each month for the full term, find the total amount of interest she will pay. $0 X ?
Emma plans to loan $1,000 to her friend, who will pay a simple interest rate of 5.8% every year for the loan. If no payments are made and no further borrowing occurs between them for 13 years, then how much money will Emma' s friend owe her? $1,061.36 $1,754.00 $2,081.20 $158.00 Now, assume that Emma's friend volunteers to pay compound interest instead of simple interest for her loan. If interest is accrued at 5.8% compounded annually, all other things being equal, how much money will Emma's friend owe her in 13 years? $2,081.20 $1,058.00 $120.71 $ 1,754.00 Emma has another investment option in the market that pays 5.8% nominal interest, but it's compounded quarterly. Keeping everything else constant, how much money will Emma have in 13 years if she invests $1,000 in this fund? $158.00 $129.72 $2,114.01 $1,059.27
To go on a school trip, Felipe borrows $700. He makes no payments until the end of 4 years, when he pays off the entire loan. The lender charges simple interest at an annual rate of 6%. a) how much total interest will Felipe have to pay? b) what will the total repayment amount be (including interest)?
1. Citari took a personal loan of RM10,000 and paid equal monthly payments for five years at an interest rate of 6% compounded monthly. a) Find the monthly payment. (RM193.33) b) If Citari fails to pay the first five monthly payments, find the amount she has to pay on the sixth payment in order to settle the outstanding arrears. (RM1174.58)
Lashonda wants to buy a new house but needs money for the down payment. Her parents agree to lend her money at an annual rate of 2%, and charged a simple interest. They lend her $6000 for 3 years. She makes no payments except the one at the end of that time. a) how much total interest will lashonda have to pay? b) what will the total repayment amount be (including interest)?
An acquaintance asks Kara to borrow money today to help her repair her car. The person will be able to repay Kara $500 in one year, and Kara is fully expects she will be repaid on time (risk free). If Kara requires a 5.0% return, what (largest) amount should she lend to her acquaintance?$525.00$495.00$475.00$476.19$471.43

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS