To go on a summer trip, Bob borrows s700. 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 5%. Answer the following questions. If necessary, refer to the list of financial formulas. (a) How much total interest will Bob have to pay? (b) What will the total repayment amount be (including interest)?

To go on a summer trip, Bob borrows s700. 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 5%. Answer the following questions. If necessary, refer to the list of financial formulas. (a) How much total interest will Bob 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

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Your mortgage has 21 years left, and has an APR of 8.707% with monthly payments of $1,449. a. What is the outstanding balance? b. Suppose you cannot make the mortgage payment and you are in danger of losing your house to foreclosure. The bank has offered to renegotiate your loan. The bank expects to get $125,507 for the house if it forecloses. They will lower your payment as long as they will receive at least this amount (in present value terms). If current 21-year mortgage interest rates have dropped to 5.660% (APR), what is the lowest monthly payment you could make for the remaining life of your loan that would be attractive to the bank? a. What is the outstanding balance? The outstanding balance is $ (Round to the nearest cent.)
Explain well with proper answer.
Suppose you are buying your first condo for $190,000, and you will make a $10,000 down payment. You have arranged to finance the remainder with a 30-year, monthly payment, amortized mortgage at 3.5% nominal interest rate, with the first payment due in one month. What will your monthly payments be? You are not required to show calculations. However to receive credit you must provide the inputs used (N, PMT, FV, I/Y, PV) to solve. If you utilize a template, you can copy and paste the section used in the submission. $808.28 $853.18 $527.78
You decide that you need $47,000 in 3 years to make a down payment on a house. You plan to make annual fixed deposits to achieve your goal. If the interest rate is 2.5%, how much should be deposited each time? Hint use the Financial Function “PMT” to solve for the payment, and PV will be zero. You owe $25,000 to your parents. You promise to make 10 annual payments of $3,000 to settle your debt. What interest rate are your parents charging (estimated up to 2 decimal places), if you make the 10 annual payments beginning one year from now? Hint use the Financial Function “RATE”. Note if you need help use the “Help on this function” feature. This help will include an example for you to follow. You are offered an investment that will pay $14,000 per year for 17 years, beginning one year from now. If you feel that the appropriate discount rate is 3.4%, what is the investment worth to you today? Your grandparents offered you some money via the following options. Assuming an annual interest…
Question 1 (a) Your brother has asked you to help him with choosing an investment. He has $6,000 to invest today for a period of two years. You identify a bank term deposit that pays an interest rate of 5.55% with the interest paid quarterly. Calculate the value of the investment in two years.
You lend a friend $13,000, for which your friend will repay you $49,591 at the end of 6 years. What interest rate are you charging your "friend"?
Hazel has taken out a 40,000 loan that requires quarterly payments of $2300 over over five years. What is the APR for this loan how do I answer this using the TVM function
Number of payments. Tony is offering two repayment plans to Phil for a long overdue loan. Offer 1 is to receive a visit from an enforcer and the debt is due in full at once. Offer 2 is to pay back $3,800 at the end of the year at an interest rate of 17% until Phil pays off the loan principal. Phil owes Tony $12,000. How long will it take for Phil to pay off the loan if he takes offer 2? How long will it take for Phil to pay off the loan if he takes offer 2?
Ms. Dory asks Axis Bank to lend her Rs. 100 today. She says she will not be able to pay anything at the end of the first & second years but will pay the entire loan amount due at the end of 3rd year. Tenor Borrowing/Lending Rates 1 yr 3.5% 2 yr 5.5% 3 yr 7.5% What combination of products would enable Ms. Dory to ascertain the amount that should be repaid at the end of 3 years? Skip
You want to buy a $216,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan at 3.25% interest for the rest.a) What is the amount of the down payment?b) What will the amount of the mortgage?c) The bank charges 2 points on the loan. What is the amount charged for points?
You buy a home for $177,831 and put $11,459 down. You borrow the remainder. The mortgage company also charges a 3% loan and closing fee which you must also borrow. The interest rate is 6.5% for 30 years. Fill in the following to find the total cost of credit. Assume you make the monthly payments for the full number of years. Round to the nearest cent (2 decimal places). Do NOT put $ in your answer. After the down payment, you will need to borrow $ Including the loan and closing fee, the total amount financed will be $ Your monthly payment will be $ You will pay back $ total over the course of the loan. The total cost of credit will be $
If you borrows $60,000 from the bank at 10% interest over the 7 years of the loan. • What equal annual payments must be made to discharge the loan, plus pay the bank its required rate of interest (round to the nearest dollar)? • How much of his first payment will be applied to Interest? To Principle? • How much of his second payment will be applied to Interest? To Principle?

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