You have a loan outstanding. It requires making four annual payments of $8,000 each at the end of the next four years. Your bank has offered to allow you to skip making the next three payments in lieu of making one large payment at the end of the loan's term in four years. If the interest rate on the loan is 2%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment? The final payment the bank will require you to make is S (Round to the nearest dollar)

You have a loan outstanding. It requires making four annual payments of $8,000 each at the end of the next four years. Your bank has offered to allow you to skip making the next three payments in lieu of making one large payment at the end of the loan's term in four years. If the interest rate on the loan is 2%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment? The final payment the bank will require you to make is S (Round to the nearest dollar)

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 have a loan outstanding. It requires making nine annual payments of $8,000 each at the end of the next nine years. Your bank has offered to allow you to skip making the next eight payments in lieu of making one large payment at the end of the loan's term in nine years. If the interest rate on the loan is 9%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment?
You are planning for your future by depositing lump sum into a time deposit account, what amount must be deposited at the present time so that you can withdraw $600 monthly for 5 years, with the first withdrawal scheduled for 5 years from today? The bank offers you 0.5% interest monthly. (Hint: Monthly withdrawals start at the end of the month 60).
Suppose your Visa credit card charges an APR of 13.5%, compounded monthly and your current statement shows a balance of $758.50.a) If you make no payments and no additional purchases for one year, what will bethe amount owed at the end of that year?b) How much total interest will be paid?c) What is the nominal rate?d) What is the effective annual rate (EAR)?e) Suppose this credit card company requires a minimum monthly payment of $25.Assuming that no additional purchases are made and also assuming that this minimum amount is paid every month, prepare an amortization schedule for the first three months of payments.
You initially invest $5, 000 into an account, and at the end of the first year, invest another $5, 000. At the end of the third and fourth year you withdraw X from the account. For any withdrawal, there is penalty of 1% on the amount withdrawn. Find X if the account has $10, 000 in it at the end of the fifth year, and the account earns an effective annual interest rate of 7% for the the entire five years.
A student can afford to spend no more 150 e per month on a loan to pay his college fees. If the interest rate is 2% annually and the mortgage is 5 years, what is the maximum amount that the student can afford to borrow?
You need a 20-year, fixed-rate mortgage to buy a new home for $320,000. Your mortgage bank will lend you the money at a 6.9 percent APR for this 240-month loan. However, you can afford monthly payments of only $2,700, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $1,200? O $178,691 $300,333 $116,636 $122,597 O $100,748
You have a loan outstanding. It requires making nine annual payments of $5,000 each at the end of the next nine years. Your bank has offered to allow you to skip making the next eight payments in lieu of making one large payment at the end of the loan's term in nine years. If the interest rate on the loan is 4%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment? The final payment the bank will require you to make is $ (Round to the nearest dollar.) I
Your bank offers the following options on a $100,000 mortgage: i) A 15-year, 4% loan with no points ii) A 15-year, 3.5% loan, with 1.5 discount points If you plan to repay the loan in five years, what is the present value of the savings from having a lower outstanding balance at the end of the 5 years if you choose the option with points? (Use the 3.5% interest rate to discount the savings). [Hint: you first need to compute the outstanding balance at the end of year 5 for each option] $765.87 None of the above. $643.08 $1,000 please typing format
The bank is offering you 9 APR on a loan. Currently the conditions are that the 9 APR is compounded monthly. Say the bank was open to changing the compounding period to anything you would like.... b) What is the BEST-case scenario for your ieff (annual) as far as you (the customer) is concerned? Type your response
You borrowed Rs.500, 000 at 18% for five years.If you decided to settle this loan after two years, what additional amount you will pay at the end of two years to fully payback this loan while bank is not imposing any fine on you?
your credit card has a balance of $3000 in an annual interest rate of 17% with no further purchase charge to the card and the balance being paid off over five years. The monthly payment is $75 and the total interest paid is $1500. You can get a bank loan at 9.5% with a term of six years complete parts, a and B below. A. How much will you pay each month? How does this compare with the credit card payment each month? A. the monthly payment for the bank loan are approximately $__ This is $__ more than a monthly credit card payments. B. The monthly payments are the bank loan are approximately $__ This is $__ less than the monthly credit card payments. B.How much total interest will you pay? How does this compare with the total credit-card interest? A. The total interest paid over 3 years for the bank loan is approximately$__. This is $__ more than the total credit-card interest. B. The total interest paid over 3 years for the bank loan is approximately $__. This is $__ less than the…
You have an outstanding credit card balance of $3,000. You decide to stop making new charges and pay $450 each month until the balance is paid. If your annual interest rate is 18%, how many months will it take you to pay off your balance?

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