You take out a 5-year loan of $20,000 from a bank today, where repayments are made at the end of each month. The bank is having a promotion for its 50th anniversary, where they will pay you a bonus of $500 6 months from now. However, the bank has factored this bonus into the calculation of the repayments. If the bank is earning a nominal interest rate of 8% per annum compounded monthly on this loan over the coming 5 years, calculate the size of the monthly onaymont

You take out a 5-year loan of $20,000 from a bank today, where repayments are made at the end of each month. The bank is having a promotion for its 50th anniversary, where they will pay you a bonus of $500 6 months from now. However, the bank has factored this bonus into the calculation of the repayments. If the bank is earning a nominal interest rate of 8% per annum compounded monthly on this loan over the coming 5 years, calculate the size of the monthly onaymont

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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Similar questions

A $700,000 loan was received on Nov. 30, 2022, with annual interest at 9.5%, C/M, requires monthly, end of period payments of $7,700, beginning Dec.31, 2022. How many payments are needed to fully pay off the loan? How much will the final payment be? How much interest is paid on the 30th payment? What is the balance still owing after 10 years? How much of the loan principal will be paid, in total, during years 6 and 7? How much interest is paid, in total, during the life of the loan?
A business received a for year $2,000,000 loan at an interest rate of 7% per year. The principal is going to be paid at the end of the third year. If the market interest rates on similar loans are 13% per year what is the net present value of the loan?
A bank pays 6% interest, compounded semiannually. Use the appropriate formula to find how much should be deposited (in $) now to yield an annuity payment of $700 at the beginning of each six months, for 16 years. (Round your answer to the nearest cent.) $
If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
5. You are considering moving your money to a new bank offering a one-year CD that pays an 8% APR with monthly compounding. Your current bank's manager offers to match the rate you have been offered. The account at your current bank would pay interest every six months. How much interest will you need to earn every six months to match the CD?
Bank A pays 6% simple interest annually on its investment accounts. If Bank B pays interest on its account compounded semiannually, what is the annual percentage rate (APR) should the bank set if it wants to match Bank A over an investment horizon of 10 years?
Excellent bank has offered you $40,000, 30-year loan to purchase an equipment in your Factory. The loan payments are to be made on monthly basis. If the total payment at the end of the thirty-year period is $134964.00. Determine the effective annual interest rate if the interest is compounded monthly
An amount of $15,000 is borrowed from the bank at an annual interest rate of 12%. Solve, a. Calculate the equal end-of-year payments required to completely pay off the loan in four years. b. Calculate the repayment amounts if the loan ($15,000) will be repaid in two equal installments of $7,500 each, paid at the end of second and fourth years respectively. Interest will be paid each year.
An amount of $14,000 is borrowed from the bank at an annual interest rate of 11%. a. Calculate the equal end-of-year payments required to completely pay off the loan in 4 years. b. Calculate the repayment amounts if the loan ($14,000) will be repaid in two equal installments of $7,000 each, paid at the end of second and fourth respectively. Interest will be paid each year. years Click the icon to view the interest and annuity table for discrete compounding when i= 11% per year. a. The equal end-of-year payments required to pay off the loan in 4 years are $ per year. (Round to the nearest dollar.)
De Lima Enterprise plans to borrow 1,000,000 for eight years at 9% with a bank term loan.The bank requires repayment in a series of equal annul end-of- year installments. 1. What is the annual payment rounded to the nearest peso? 2.How much total interest will De Lima Company pay over the life of the loan?
A growing company plans to borrow IDR 1,000,000,000 for 5 years from a bank. Bank Sweet is willing to provide loans with an interest of 21% with installments every 6 months. Another bank, namely Bank Sour, is willing to provide a loan with a modest interest rate of 19%, to be paid every 6 months, but on the condition that the company must make a deposit for the repayment fund in the bank with an interest of 14% every 6 months. Which alternative should be chosen? Calculate the amount of savings that can be made every semester!
A bank is willing to lend money at 6% interest, compounded annually. How much would the bank be willing to loan you in exchange for a payment of $600 4 years from now?

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