Use Excel or Google Open Source Spreadsheet for this problem: You own a 10 year bond that has a face value of $9,000 and pays 6% interest each year once a year at the end of the year. Eight years after buying it, the interest rate decreases to 4%. You do not want to wait 2 more years to get your principle of $9,000 back because you really need the money now, so you decide to sell it on the open market. 1. How much can you sell it for? 2. Is it a capital loss or a capital gain? How much is the capital gain or loss?

Use Excel or Google Open Source Spreadsheet for this problem: You own a 10 year bond that has a face value of $9,000 and pays 6% interest each year once a year at the end of the year. Eight years after buying it, the interest rate decreases to 4%. You do not want to wait 2 more years to get your principle of $9,000 back because you really need the money now, so you decide to sell it on the open market. 1. How much can you sell it for? 2. Is it a capital loss or a capital gain? How much is the capital gain or loss?

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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You found your dream home, and your bid has been accepted. The house costs $250,000; you put down $50,000 and the bank will lend you the rest. You take a mortgage of $200,000 payable monthly for 30 years at a nominal (convertible 12x) rate of 5%. What will your end-of-month payments be? b. After 4 years of payments, how much do you still owe the bank? c. How much interest have you paid to date? d. If the value of your house goes up by 3% every year, what a. the equity in your home at that time?
Answer the questions below and show all working from a financial calculator. Do not use excel: 1. A security pays you an annual amount of $900 for 10 years. The seller of the security requires the first payment to be made today and the last payment to be made 9 years from today. Interest rate on this security is 5.75 percent per annum. Calculate the present value rounded to 2 decimal places. 2. What will be the present value, if $5,400 is discounted back 4 years at an interest rate of 3% compounded semi-annually?
You borrow $1,000 from a bank at 6% annual interest and promise to pay it back after a year. As you sign the loan documents, both you and the bank expect inflation to be 3% in the coming year. During the course of the year, however, the average price level rises by only 1%. What best describes this situation? Select one: a. Both you and the bank are better off because the inflation rate is less than the nominal interest rate but greater than zero. O b. The bank has gained at your expense because the real interest rate on the loan is higher than expected. c. Neither you nor the bank has gained anything extra because the inflation rate is less than the nominal interest rate. O d. You have gained at the bank's expense because you can pay the bank back in inflated dollars.
A company can borrow $780000 for 5 years by issuing bonds, on which interest is paid monthly at = 8% and the principal is paid off using a sinking fund earning = 3%. The other option is to borrow $780000 from a bank and repay the loan over 5 years with equal monthly payments at = 11%. Which option will result in a smaller periodic cost for the company? Answer: Select One How much will you save each period with this option? Answer: $
in the picture
Please make an excel spreadsheet and show the formulas in the cells for the problem below and please explain You buy a house of $450,000 today. You put a down payment of 20% and borrow a fixed-rate mortgage of $360,000 with interest rate of 4% and 15 years. After 3 years, your house is appreciated to the value of $550,000 and market interest rate goes up to 6.5%. How much money will you make in book after 3 years?
You would like to save up $1184 to travel in 4 years. To do so, you will buy a savings bond that has an interest rate of 15.3%. How much must you invest in the bond today to reach your goal? Answer:
You are thinking of building a new machine that will save you $2,000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 1% per year forever. What is the present value of the savings if the interest rate is 8% per year? The present value of the savings is $ (Round to the nearest dollar.) Enter your answer in the answer box and then click Check Answer. All parts Clear All
Consider the following two savings plans that you think about starting at the age of21:• Option 1: Save $2,000 a year for 10 years. At the end of 10 years, make nofurther investments, but invest the amount accumulated at the end of every 10 years until you reach the age of 65. (Assume that the first deposit will be made when you are 22.)• Option 2: Do nothing for the first 10 years. Start saving $2,000 a year every year thereafter until you reach the age of 65. (Assume that the first deposit will be made when you turn 32.) If you were able to invest your money at 8% over the planning horizon, which plan would result in more money saved by the time you are 65? (See Figure 2.23.)
You are planning to put $1,060 in the bank at the end of each year for the next three years in hopes that you will have enough money for a newest LCD model that is available. If you are investing at an annual interest rate of 12%, you'll have accumulated at the end of three years. How would you plug this into a BA II calculator?
You buy a house of $450,000 today. You put a down payment of 20% and borrow a fixed-rate mortgage of $360,000 with interest rate of 4% and 15 years. After 3 years, your house is appreciated to the value of $550,000 and market interest rate goes up to 6.5%. How much money will you make in book after 3 years? plesae show all steps in an excel spreadsheet
Suppose you invest $200 a month for 6 years into an account earning 9% compounded monthly. After 6 years, you leave the money, without making additional deposits, in the account for another 20 years. How much will you have in the end? $ Suppose instead you didn't invest anything for the first 6 years, then deposited $200 a month for 20 years into an account earning 9% compounded monthly. How much will you have in the end?

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