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.)

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.)

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 $4,000 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? The final payment the bank will require you to make is $52084.15. (Round to the nearest cent.)
You want to borrow $59,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $1,100 but no more. Assuming monthly compounding, what is the hughest rate you can afford on a 66-month APR loan? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places
None
You have an outstanding student loan with required payments of $500 per month for the next four years. The interest rate on the loan is 9.00% APR (monthly). You are considering making an extra payment of $200 today (i.e., you will pay an extra $200 that you are not required to pay). If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? What effective rate of retum (expressed as an APR with monthly compounding) have you eamed on the $200? (Note: Be careful not to round any intermediate steps less than six decimal places.) If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? The final payment is $ (Round to the nearest cent.)
You have a loan outstanding. It requires making four annual payments of $1000 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 loan's term in four years. If the interest rate on the loan is 7%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment? Round answer to nearest dollar
A payday loan is structured to obscure the true interest rate you are paying. For example, you pay a $15 "fee" for a two-week $180 payday loan (when you repay the loan in two weeks, you pay $180+$15). What is the effective annual interest rate for this loan? Assume 26 bi-weekly periods per year. Enter your answer as a decimal, rounded to 4 decimal places. Your Answer:
You have a loan outstanding. It requires making seven annual payments of $4,000 each at the end of the next seven years. Your bank has offered to allow you to skip making the next six payments in lieu of making one large payment at the end of the loan's term in seven years. If the interest rate on the loan is 6%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment?
If Bobby takes out a mortgage for 30 years at an interest rate of 4% and his monthly repayments are $835.48, what is the loan principal (that is, the balance of the loan at drawdown)? Give your answer to the nearest ten dollars. Do not include commas or the dollar sign in your answer.
You have a loan outstanding. It requires making three annual payments of $8,000 each at the end of the next three years. Your bank has offered to allow you to skip making the next two payments in lieu of making one large payment at the end of the loan's term in three years. If the interest rate on the loan is 5%, 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.)
You have an outstanding student loan with required payments of $500 per month for the next four years. The interest rate on the loan is 8% APR (monthly). You are considering making an extra payment of $150 today (that is, you will pay an extra $150 that you are not required to pay). If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? What effective rate of return (expressed as an APR with monthly compounding) have you earned on the $150?
If you withdraw part of your money from a certificate of deposit before the date of maturity, you must pay an interest penalty. Suppose you invested $7000 in a one-year certificate of deposit paying 8.1% interest. After 6 months, you decide to withdraw $7000. Your interest penalty is 3 months simple interest on the $7000. What interest penalty do you pay? (Round your answer to two decimal places)
You have a loan outstanding. It requires making nine annual payments of $7,000 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 8%, what final payment will the bank require you to make so that it is indifferent to the two forms of payment?

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