Your answer is incorrect.Your brother has asked you for a loan and has promised to pay you $5,400 at the end of three years. If you normally invest to earn 8.00percent per year, how much will you be willing to lend to your brother if you view this purely as a financial transaction (i.e., you don'tgive your brother a special deal)? (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases roundyour final answer to the nearest penny.)Amount to be invested today$

Step 1: Given Value for Calculation Future Value = fv = $5400Time = t = 3 YearsInterest rate = r =…

Answered: Your answer is incorrect. Your brother…

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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Your mother received an offer from a bank. The flier is offering your mother to open a credit card with that bank. The advertised rate on the flier is only 15%, which is considerably lower compared to other rates offered by competing banks. Then, in the fine print, it said that interest is paid monthly. Your mother asked you what that meant or what would be the effect of that if any. What would you tell her? Compute for the EFF %. How would you explain to her why there is a difference between the 15% and the rate that you computed? Dont use excel
This is for financial mathematics, thank youu :) I must show work :)
Suppose a husband wants to take his wife on a trip three years from now to Europe to celebrate their 40th anniversary. He has just received a $26,000 inheritance from an uncle and intends to invest it for the trip. The husband estimates the trip will cost $33,800. What interest rate, compounded annually, must be earned to accumulate enough to pay for the trip? Note: Use tables, Excel, or a financial calculator. Do not round your Intermediate values. Enter your answer rounded to the nearest whole percentage. (FV of $1, PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) Solve for i Present Value: Future Value Th (M $ 26,000 3 8%
You have $1,900 that you want to invest in your classmate’s start-up business. You believe the business idea to be great and expect to get $4,550 back at the end of three years. If all goes according to plan, what will be the annual return on your investment? (If you solve this problem with algebra round intermediate calculations to 4 decimal places, in all cases round your final answer to 2 decimal places, e.g. 8.72%.) The expected annual rate of return_____%
Derek borrows $40,041.00 to buy a car. He will make monthly payments for 6 years. The car loan has an interest rate of 5.01%. After a 11.00 months Derek decides to pay off his car loan. How much must he give the bank? Submit Answer format: Currency: Round to: 2 decimal places. C unanswered not submitted Attempts Remaining: Infinity
Suppose a man took out a 30-year loan with an annual rate of 6% to put an addition on his house. His banker encouraged him to put other expenses into the loan if he wished, so he increased the loan in order to purchase furniture, a new car, and a computer. Suppose the computer cost $1,200. Assume that the loan is an add on loan to calculate parts a. and b. a. What was the amount of interest that he paid on the computer part of his loan? b. What was the total cost of his computer? a. The total interest is $ (Simplify your answer.) (CCS)
If you earn 5% per year on your bank account, how long will it take an account with $110 to double to $220? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
1. Zaggy Zargawhoop has an idea for a new business. In order to develop his idea, he needs to invest $600 today. Zaggy's idea will pay off $690 next year for certain. Suppose that Zaggy has no savings to fund his idea and has to borrow money from the bank. a. Suppose that the interest rate for borrowing and for lending is 12%. Should Zaggy borrow money from the bank to fund his idea? b. Suppose that the interest rate for borrowing and for lending is 22%. Should Zaggy borrow money from the bank to fund his idea? Now suppose that Zaggy has $600 in his bank account. c. Suppose that the interest rate for borrowing and for lending is 12%. Should Zaggy withdraw his savings to fund his idea? d. Suppose that the interest his savings to fund his idea? e. Does the method of financing (whether through savings or debt) appear to affect the relationship between the interest rate and the decision to undertake investment? Explain. for borrowing and for lending is 22%. Should Zaggy withdraw
A man borrows $60,000 to help pay for his college expenses. He intends to pay off the loan with regular monthly payments over the next 20 years. Find the monthly payment if he is being charged 4.7% interest per year, compounded monthly. Give the answer to 2 decimal places, and do not use the $ sign in the answer box. The monthly payment is Blank 1. Calculate the answer by read surrounding text. dollars.
Hello, could you help me with this question? I am having a hard time accomplishing this calculation. Zachary Porter of Abilene, Texas, is contemplating borrowing $10,000 from his bank. The bank could use add-on rates of 6.5 percent for 3 years, 7 percent for 4 years, and 8 percent for 5 years. Calcualte the finance charge and monthly payment for these three options. If you could help me with this question, that would be great! Thanks. I look forward to hearing back from you.
If you owe $32,000 payable at the end of five years, what amount should your creditor accept in payment immediately if she could earn 12 percent on her money? Use Appendix B for an approximate answer, but calculate your final answer using the formula and financial calculator methods. Note: Do not round intermediate calculations. Round your final answer to 2 decimal places. Present value
Which of these situations would you prefer? Solve, a. You invest $2,500 in a certificate of deposit that earns an effective interest rate of 8% per year. You plan to leave the money alone for 5 years, and the general price inflation rate is expected to average 5% per year. Income taxes are ignored. b. You spend $2,500 on a piece of antique furniture. You believe that in 5 years the furniture can be sold for $4,000. Assume that the average general priceinflation rate is 5% per year. Again, income taxes are ignored.

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