Suppose the interest rate is 4.4%.a. Having $550 today is equivalent to having what amount in one year?b. Having $550 in one year is equivalent to having what amount today?c. Which would you prefer, $550 today or $550 in one year? Does your answer depend on when you need the money? Why or why not?a. Having $550 today is equivalent to having what amount in one year?It is equivalent to $. (Round to the nearest cent.)

a. Future Value:Having $550 today is equivalent to having $574.20 in one year at a 4.4% interest…

Answered: Suppose the interest rate is 4.4%. a.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Suppose you borrowed $1,000 from the bank and the rate of interest was 5%. What would the simple interest be if the amount is borrowed for 1 year? Suppose you deposit $4,000 at a bank at a simple interest rate of 7.5% per year. How much money will you have in the bank after 10 years? Question 2: The following questions are related to Compounded Interest: You deposit $2000 in an account earning 3% interest compounded monthly. How much will you have in the account in 20 years? How much interest will you earn? How much would you need to deposit in an account now in order to have $6,000 in the account in 8 years? Assume the account earns 6% interest compounded monthly.
Suppose you want to purchase a home for $375,000 with a 30-year mortgage at 5.14% interest. Suppose also that you can put down 25%. What are the monthly payments? (Round your answer to the nearest cent.) $ What is the total amount paid for principal and interest? (Round your answer to the nearest cent.) $ What is the amount saved if this home is financed for 15 years instead of for 30 years? (Round your answer to the nearest cent.) $
just say it option. Question 1) You took 100.000 TL car loan from a bank. You will repay the loan to the bank in 4 years with a compound interest of 12% per month in 48 equal installments. In this case, how much of the first installment payment is interest and how much is the principal payment? Please choose one: А. 1630, 1000 В. 1000, 1630 С. 1430, 1200 D. 1200, 1430 Question2) If payments are made every 6 months, calculate the interest for the following situations? 9% annual compounded quarterly interest Quarter 3%, quarterly compounded interest 8.8% per annum, quarterly compounded interest Please choose one: А. 9.15%, 3.09%, 9.06% B. 9.55%, 3.09%, 8.8% C. 4.55%, 6.099%, 4.48% D. 9.45%, 6.09, 9.16% E. 9.1%, 12.18%, 8.96
Solve all three parts Q) Suppose you decide to take out the $1 million 30-year fixed rate mortgage at 4%. a) How much money will you pay in interest in the first month (units: dollars)? b) How much principle will you still have left to pay off after making your first 15 years worth of payments (units: thousands of dollars)? c) How much money money will you pay in interest in the 181st payment (units: dollars)?
a. You need $17,000 in five years but you only have $12,000 now. At what interest rate must you invest the money assuming the interest is compounded annually? b. You have a $20,000 note payable which is due in three years. How much money must you put into a savings account today in order to have enough money to pay off the debt on time assuming your savings account earns 3% interest compounded annually? c. You put $2,750 into an account earnings 4% interest compounded QUARTERLY. How much will be in this account at the end of 4 YEARS? d. In question “b." above, if you leave he money in the account for one more YEAR, how much more interest will you earn in that additional year (Year 5)? e. How long will it take to double $2,000 to $4,000 assuming you invest the $2,000 into an account earning 7% interest compounded annually?
Suppose you want to purchase a home for $525,000 with a 30-year mortgage at 4.84% interest. Suppose also that you can put down 30%. What are the monthly payments? (Round your answer to the nearest cent.) $ What is the total amount paid for principal and interest? (Round your answer to the nearest cent.) $ What is the amount saved if this home is financed for 15 years instead of for 30 years? (Round your answer to the nearest cent.)
Mf4.
Assume that somebody has to pay £2000 in three years’ time and £3000 in seven years’ time. They want to pay off both debts by a single payment in six years’ time. Assuming an interest rate of 8% p.a., how much do they have to pay?
4. You are thinking of buying house for $70,000. The house will be worth $100,000 in five years. A. Should you buy the lot if r = 0.05? (r= interest rate a bank would pay you) B. Should you buy it if r = 0.10? (r= interest rate a bank would pay you)
Suppose you took out a 25 year mortgage at 2.32% to purchase a home, making monthly payments of $2100. After 5 years and 6 months you are able to refinance for 20 years at 2.15%, making monthly payments of $1950. How much do you save on interest by refinancing?
Consider two 1-year loans with a principal of $1 million and a default probability of 2% each. Assume that if one loan defaults, the other does not. Assume that in the event of default, the loan leads to a loss that can take any value between $0 and $1 million with equal probability, i.e., the probability that the loss is higher than $x million is 1-x. If a loan does not default, it yields a profit equal to $0.02 million. a) Compute the 1-year 99% Value at Risk (VaR) and Expected Shortfall (ES) of a single loan. b) Compute the 1-year 99% VaR and ES for the portfolio of both loans. c) Does the VaR and the ES satisfy the subadditivity property in this case?
3. Suppose you decide to purchase a $150000 home for $20000 down. A down payment is subtracted from your home’s value and therefore you owe $130000. Well to pay for this amount you will need a loan, so $130000 is the principal on your loan. Suppose the interest rate on a 30 year mortgage is 4.5%. What will your monthly payment be? Create an amortization table for this loan. How much will you pay on the loan if you pay off the loan as

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS