Yolanda borrows $70,000 to buy a BMW. The dealer charges her an APR of 5%, compounded monthly, and requires her to make payments also on a monthly basis for next five years. What will be the amount of each payment? a) $2,265 b) $3,698 O c) $1,173 d) $16,168 O e) $1,321

Yolanda borrows $70,000 to buy a BMW. The dealer charges her an APR of 5%, compounded monthly, and requires her to make payments also on a monthly basis for next five years. What will be the amount of each payment? a) $2,265 b) $3,698 O c) $1,173 d) $16,168 O e) $1,321

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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Daniel and Jan agreed to pay $556,000 for a four-bedroom colonial home in Waltham, Massachusetts, with a $70,000 down payment. They have a 25-year mortgage at a fixed rate of 638638 %. (Use Table 15.1.) a. How much is their monthly payment? Note: Round your answer to the nearest cent. Monthly payment: b. After the first payment, what would be the balance of the principal? Note: Round your answers to the nearest cent. Payment number Portion to interest portion to principal Balance of loan outstanding 1 TABLE 15.1 Amortization table (mortgage principal and interest per $1,000) Rate Interest Only 10 Year 15 Year 20 Year 25 Year 30 Year 40 Year 2.000 0.16667 9.20135 6.43509 5.05883 4.23854 3.69619 3.02826 2.125 0.17708 9.25743 6.49281 5.11825 4.29966 3.75902 3.09444 2.250 0.18750 9.31374 6.55085 5.17808 4.36131 3.82246 3.16142 2.375 0.19792 9.37026 6.60921 5.23834 4.42348 3.88653 3.22921 2.500 0.20833 9.42699 6.66789 5.29903 4.48617 3.95121 3.29778 2.625…
Mayesha purchased a large screen TV for $4,000 and can pay it off in ten months with an add-on interest loan at an annual rate of 11.5%, or she can use her credit card that has an annual rate of 18%. If she uses her credit card, she will pay $400 per month (starting next month) plus the finance charges for the month. Assume that her credit card company uses the unpaid balance method to compute her finance charges and that she is making no other transactions on her credit card. Which option will have the smaller total finance charges on her loan? What is the general method that should be used to solve this problem? A. Use the formula l= Prt to find the finance charge for both the add-on and the credit card option. Choose the option that produces the lower number. O B. Multiply the cost of the TV set by the annual rate to find the finance charge for both the add-on and the credit card option. Choose the option that produces the higher number. O C. Use the formula l= Prt to find the…
Ria buys a two-year-old Honda from a car dealer for P450,000. She puts P150,000 down and finances the rest through the dealer at 13% effective interest rate. If she agrees to make 36 monthly payments, find the size of each payment.
Carol borrows $30, 000 from the bank. For a six-year loan, the bank requires annual end-of-year payments of $5, 878.05. The annual interest rate on the loan is?
A woman decides to purchase a $23000 car, and makes down payment of $3500. She arranges to borrow the remainder from a bank that will charge her 4.5% interest. She will make monthly payments for 4 years. a. Find her monthly payment amount b. determine the total amount she would pay for the car and the total amount of interest paid
Rebecca Carlson purchases a car for $25,000 and finances her purchase by borrowing the money at 8% per year compounded monthly; she pays off the loan with equal monthly payments for 5 years. What will be the size of her monthly loan payment?
Sonia borrowed $3717.00 compounded annually to help finance her education. She contracted to repay the loan in annual payments of $251.00 each. If the payments are due at the end of each year and interest is 5% compounded annually, how long will Sonia have to make annual payments? State your answer in years and months (from 0 to 11 months). ion 4Sonia will have to make payments for year(s) and months).
Gisella borrows $120, 000 from Capital Mortgage Co. at 9% per annum interest, monthly payments for 30 years. At the end of 6 years, she sells the house and will pay off the loan at the closing of sale (assume that the sale takes place at the end of the sixth year). What will her loan payoff be? Using excel functions only and an amortization schedule.
Dana has made a down payment of $100,000 on a recent home purchase for $300,000. She was able to obtain bank financing and pays a fixed annual rate of 6 percent on her 30-year mortgage. If she makes steady, fixed monthly payments, what loan balance will remain after the 47th payment?
Jerry signs a $16,000 loan for the purchase of a new car. The terms is for 48 months, at an interest rate of 4.8%. What is Jerry’s monthly payment? You must show the formulas with the values filled in.
While buying a new car, Ryan made a down payment of $1,200 and agreed to make month-end payments of $320 for the next 3 years and 6 months. She was charged an interest rate of 4% compounded semi-annually for the entire term. a. What was the purchase price of the car? b. What was the total amount of interest paid over the term? Since the birth of her daughter, 18 years ago, Jeremy has deposited $150.00 at the beginning of every month into an RESP. The interest rate on the plan was 3.00% compounded monthly for the first 9 years and 3.60% compounded monthly for the next 9 years. a. Calculate the value of the fund today (the end of 18year term b. How much of this is interest?
Shelley purchased a home in Maryland Heights, MO, for $204,000. Her down payment was 20% of the cash price, and she obtained a mortgage for 20 years at 7%. What are Shelley's monthly payment and total interest cost? (Round your answers to the nearest cent.) a)Monthly payment b) Total interest cost

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