You are enrolling in an MBA program. To pay your tuition, you can either take out a standard student loan (so the interest payments are not tax deductible) that has an EAR of 5% or you can use a tax-deductible home equity loan with an APR (monthly compounding) of 5.875%. You anticipate being in a very low tax bracket, so your tax rate will be only 15%. Which loan should you use? The after-tax rates for the two loans are: Compare Percent Standard loan rate: %. (Round to three decimal places.) Home equity loan rate: %. (Round to three decimal places.) The loan I should use is: (Select the best choice below.) A. The home equity loan. B. Neither loan, because the rates are too high, C. Either loan, because the rates are the same. D. The standard student loan.

You are enrolling in an MBA program. To pay your tuition, you can either take out a standard student loan (so the interest payments are not tax deductible) that has an EAR of 5% or you can use a tax-deductible home equity loan with an APR (monthly compounding) of 5.875%. You anticipate being in a very low tax bracket, so your tax rate will be only 15%. Which loan should you use? The after-tax rates for the two loans are: Compare Percent Standard loan rate: %. (Round to three decimal places.) Home equity loan rate: %. (Round to three decimal places.) The loan I should use is: (Select the best choice below.) A. The home equity loan. B. Neither loan, because the rates are too high, C. Either loan, because the rates are the same. D. The standard student loan.

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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When you graduate from college, you apply for and are offered a job that pays $1,900 per month. You have a student loan debt of $14,000 with a 4% interest rate. Answer parts a) through e) below. a) What should your maximum rent be to keep your Front-End DTI Ratio no higher than 29%? $ 551 (Round to the nearest dollar as needed.) b) What should your maximum student loan payment be to maintain a 37% Back-End DTI Ratio? $ 152 (Round to the nearest dollar as needed.) c) Use technology to determine how long it will take to pay off the loan using the payment from part b). 110 month(s) (Round to the nearest whole number as needed.) d) You want to pay off the loan in a more reasonable amount of time, 72 months. Use technology to determine the amount that the loan payment needs to be to meet this goal. $ 219 (Round to the nearest dollar as needed.) e) If you increase the loan payment to the amount calculated in part d), what minimum income level do you need to maintain your present lifestyle…
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Tony Ring wants to attend Northeast College. He will need $65,000 4 years from today. Assume Tony's bank pays 12% interest compounded semiannually. What must Tony deposit today so he will have $65,000 in 4 years? (Use the Table 12.3 provided.) Note: Do not round intermediate calculations. Round your answer to the nearest dollar amount.
1) In a few short years, you will graduate and enter the workforce. Let us suppose that you and a friend both start working at the age of 23 and decide on very different ways to fund your eventual retirement. In this exercise, we explore these decisions. Neither of you have any savings (P = 0), plan to retire at age 66, and expect to earn 8.4% annual interest, compounded monthly, on all your investments. a) Having taken this class, you decide to start immediately, investing $120 per month. How much money will be in your account in 20 years? b) At this point (you are now 43 years old), you will stop making monthly deposits into your account. Now, the amount you calculated in part (a) will accumulate interest for 23 years (until you are 66 years old). How much is in your account now? Indicoob selled pham
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suppose you are in a hurry to get your income refund. if you mail your tax return, you’ll receive your refund in 5 weeks. if you file the return electronically through a tax service, you can get the estimated refund tomorrow. the service subtracts 100 dollar fee and pays you the remaining expected refund of $1956. what is the apr? what is the ear? how large does the refund have to be for the apr to be 15%?
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You are thinking of buying a house beside the College which you will rent to students. You expect to receive $2,000 a month in rental income. Your real estate agent estimates that you will be able to sell the property for $250,000 at the end of 46 months. You'd like a return of at least 0.2% per month. What is the most that you should pay for the house, assuming that you will purchase the house today and receive the first (beginning of month) rental payment today. What is the most that you should pay for the property today? (Round to the nearest dollar.)

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