Suppose you have three personal loans outstanding to your friend Elizabeth. A payment of $1,000 is due today, a $500 payment is due one year from now, and a $250 payment is due two years from now. You would like to consolidate the three loans into one, with 36 equal monthly payments, beginning one month from today. Assume the agreed interest rate is 8% (effective annual rate) per year. a. What is the annual percentage rate you will be paying? b. How large will the new monthly payment be?

Suppose you have three personal loans outstanding to your friend Elizabeth. A payment of $1,000 is due today, a $500 payment is due one year from now, and a $250 payment is due two years from now. You would like to consolidate the three loans into one, with 36 equal monthly payments, beginning one month from today. Assume the agreed interest rate is 8% (effective annual rate) per year. a. What is the annual percentage rate you will be paying? b. How large will the new monthly payment be?

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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(Components of an annuity payment) You take out a 20-year mortgage for $275,000 to buy a new house. What will your monthly payments be if the interest rate on your mortgage is 6 percent? Use a spreadsheet to calculate your answer. Now, calculate the portion of the 120th monthly payment that goes toward interest and principal. Use five decimal places for the monthly interest rate in your calculations. a. Using a spreadsheet to calculate your answer, your monthly payments will be $ ( Round to the nearest cent.)
You have your choice of two investment accounts. Investment A is a 7-year annuity that features end-of-month $2,900 payments and has an APR of 6 percent compounded monthly. Investment B is an annually compounded lump-sum investment with an APR of 6 percent, also good for 7 years. How much money would you need to invest in B today for it to be worth as much as Investment A 7 years from now? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Present value
You are planning to borrow $500,000 on a 20-year fully amortized mortgage. The interest rate is 8% compounded semi-annually. You choose the monthly payment. a. What is the effective monthly rate for calculating the monthly payment? b. What is your monthly payment? c. How much will you owe the bank in the end of the 5th year. d. What fraction of the payment made at the end of the 12th year will represent repayment of principal?
You take out a 20-yearmortgage for $310,000 to buy a new house. What will your monthly payments be if the interest rate on your mortgage is 9 percent? Use a spreadsheet to calculate your answer. Now, calculate the portion of the 96th monthly payment that goes toward interest and principal. Use five decimal places for the monthly interest rate in your calculations. a. Using a spreadsheet to calculate your answer, your monthly payments will be
Suppose that your unsubsidized Stafford loans plus accumulated interest total $ 34000 at the time you start repayment, the interest rate is 7.5% APR, and you elect the standard repayment plan of a fixed amount each month for 10 years. What is your monthly repayment? Repayment amount = How much will you pay in interest?Interest paid =
Assume you graduate from university with a $20,000 student loan. If your interest rate is fixed at 4.55% APR with monthly compounding and you will repay the loan over a 20-year period, what will be your monthly payment? The monthly payment will be $ (Round to two decimal places.)
suppose you are buying your first condo for 145,000 and you will make $15,000 down payment. you have arranged to finnace the remainder with a 30 year monthly payment amortized mortgage at a 55 nominal interest rate with first payment due in one month what will your monthly payments be? how much of first month payment is the prindipal
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Assume 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. $68.94 b. $154.58 c. $26.98 d. $89.32
You plan to purchase a $400,000 house using either a 25-year mortgage obtained from your local savings bank with a rate of 8.40 percent, or a 10-year mortgage with a rate of 7.65 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate the amount of interest and, separately, principal paid on each mortgage. What is the difference in interest paid? b. Calculate your monthly payments on the two mortgages. What is the difference in the monthly payment on the two mortgages? (For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16)) a. b. Interest under 10-year mortgage Interest under 25-year mortgage Difference in interest paid Monthly payment under 10-year mortgage Monthly payment under 25-year mortgage Difference in monthly payment
Suppose that your unsubsidized Stafford loans plus accumulated interest total $22000 at the time you start repayment, the interest rate is 9%APR, and you elect the standard repayment plan of a fixed amount each month for 10 years. What is your monthly repayment? How much will you pay in interest?

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