9108. Your brother-in-law borrowed $2,000 from you 4 years ago and then disappeared. Yesterday he returned andexpressed a desire to pay back the loan, including the interest accrued. Assuming that you had agreed to charge him 10%annual interest and he wishes to make 5 equal annual payments beginning one year from now, how much will he need topay you annually in order to pay off the debt? (Assume that the loan continues to accrue interest at 10% per year.)111213141516171010. So you can retire early, you have decided to start saving $500 a month starting one month from now. You plan toretire as soon as you can accumulate $1 million. If you can earn 5 percent APR with monthly compounding on yoursavings, how many years will it be before you can retire?

A loan is a financial arrangement in which one or more people, companies, or other entities lend…

Answered: Your brother-in-law borrowed $2,000…

Business

Finance

Your brother-in-law borrowed $2,000 from you 4 years ago and then disappeared. Yesterday he returned and

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

See similar textbooks

Related questions

Q: Dr Musonda is struggling to repay his loan of K600,000 with payments of K12,800 made monthly in…

A: The future value is useful to investors and financial planners, as they use it to estimate how much…

Q: Tony is offering two repayment plans to Phil for a long overdue loan. Offer 1 is to receive a visit…

A: We take loans when we have a cash crunch or when we need funds to buy something like a car, a house,…

Q: Pedro borrows P300,000.00 from lender ABC today at 12% compounded monthly. To fulfill his obligation…

A: As you have asked a question with multiple parts, we will solve the first 3 parts as per policy of…

Q: Tony Ring wants to attend Northeast College. He will need $50,000 6 years from today. Assume Tony's…

A: We need to use compound interest formula below to calculate principal deposit today to get desired…

Q: You borrow $500 from a family member and agree to pay it back in six months. Because you are part of…

A: Principal amount borrowed (P) = $500Rate of interest (r) = 0.5% per monthTime = 6 months

Q: Kurt loans Randy $14000. Randy repays the loan by paying Kurt $4000 at the end of one year and $6000…

A: The Effective Interest Rate is the actual interest rate earned or paid on a financial instrument…

Q: semiannual payments over the next 9 years.

A: Amortization is an accounting method that lowers the book value of the loan or intangible asset…

Q: Paul borrowed $500000 from the bank for mortgage. The interest rate is 7.8% compounded monthly. a.…

A: “Since you have posted a question with multiple sub-parts, we will provide the solution only to the…

Q: Suppose you loan $10,000 for 1 year to an individual who agrees to pay you interest at a compound…

A: Interest charged on the principal amount and the interest accrued is known as Compound Interest. It…

Q: John bought an expensive $2,740 stereo. He took out an amortized loan for the full amount at 3.12%…

A: A type of loan in which the borrower has to make a schedule for the periodic payment regarding both…

Q: John took a personal loan of $100,000 from the bank at a nominal interest rate of 6% per year…

A: Disclaimer: “Since you have asked multiple questions, we will solve the first question for you. If…

Q: Sam Robinson borrowed $10,000 from a friend and promised to pay the loan in 10 equal annual…

Q: A man plans to take a vacation in 5 years. He wants to buy a certificate of deposit for $1300 that…

A: To calculate the simple interest rate we will use the below formula Interest rate = [(A-P)/P]/T…

Q: A couple borrows $935,000 for 7 years for the purchase of a vacation home at interest rate of 7…

A: The objective of the question is to calculate the annual payments on a loan and the reduction in the…

Q: Garret just closed a new loan on his 4-unit apartment as follows: Initial loan amount, $1,000,000,…

A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for…

Q: To go on a summer trip, Bob borrows s700. He makes no payments until the end of 4 years, when he…

A: The total interest to be paid is calculated as simple interest amount for 4 years whereas total…

Q: 1. An employee obtained a loan of P 10,000 at the rate of 6% compounded annually in order to build a…

A: Since you have asked multiple questions, we will solve the first question as per policy. Please ask…

Q: 3. Joe Burrow loans Kenyan Drake $400,000. Burrow accepts a 5% note, which requires quarterly…

A: Bonds are a representation of a promise to pay interest, typically every two years, and to repay the…

Q: 8. Your brother-in-law borrowed $2,000 from you 4 years ago and then disappeared. Yesterday he…

A: Future Value Future Value is the value which is measured at a specified date at a given interest…

Q: Christopher just borrowed $19,500.00 to buy a used minivan. The terms of the loan require him to…

A: Amount borrowed, pv $ 19,500.00Equal monthly payments, pmt $ 340.10Period (years), nper6Extra…

Q: John borrowed $10,000 and agreed to pay it off with annual 591 эсол у фли 59+ + +95шлеч years. The

A: Amortization is the process of gradually reducing the value of an asset over time, typically for…

Q: Mr. Park plans to loan 500,000 from a bank to replace his old equipment. The bank approved him the…

A: Here, Loan Amount is 500,000 Interest Rate (r) is 15% Compounding Period (m) is Monthly i.e 12 Time…

Q: e situation described below, identify the initial payment, the term interest rate, and the number of…

A: Future value of the deposit includes the initial amount and amount of interest being accumulated…

Q: Two years ago, Paul borrowed $10000 from his sister Gerri to start a business. Paul agreed to pay…

A: Borrowed amount = $10,000Interest rate for first 2 years = 4%Interest rate for next 5 years = 3%To…

Q: Larry Davis borrows $87,000 at 11 percent interest toward the purchase of a home. His mortgage is…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: Abigail received a 15 year loan of $280,000 to purchase a house. The interest rate on the loan was…

A: Mortgage loans are paid by equal periodic and fixed payments and these carry the payment of interest…

Q: Greg Brown borrowed $100,000 to purchase a house. He agreed to repay the loan with equal monthly…

A: Installment amount is the number of periodic payments necessary to repay a loan.…

Q: Jimmy buys a piece of property worth $90454. Jimmy makes a down payment of $17541, and pays the…

A: A mortgage is a type of loan in which property, piece of land, or other rental properties are…

Q: ou loaned your brother a substantial amount of money and are working out a payment system. You’ve…

A: The Person loaned your brother a substantial amount of money and are working out a payments system.…

Q: Will has a 30-year mortgage on a $100,000 loan for his house in Florida. The interest rate on the…

A: Mortgage is long-term amortized loan contract which used to but fixed assets, generally home.…

Q: 1. Your sister bought a condominium unit for P9 300 through a condominium loan which she availed of…

A: price of condominium = P9300 downpayment = 30% financed amount = p9300 x (1-30%) = P9300 X 70% =…

Q: Shawn received a 30 year loan of $295,000 to purchase a house. The interest rate on the loan was…

A: Here,Loan Amount is $295,000Time of Loan is 30 yearsInterest Rate of Loan is 4.20%Compounding Period…

Q: Jack sells his lawn-mowing business for $50,000 but the buyer wants to pay for it in two cash…

A: Present value of future amount is computed by following formula:-PV = wherePV = Present value of…

Q: Jason bought a home in Arlington, Texas, for $127,000. He put down 25% and obtained a mortgage for…

A: Price of home = $ 127000 Down payment = 25% Loan amount (PV) = 127000*(1-0.25)…

Q: Pedro borrows P300,000.00 from lender ABC today at 12% compounded monthly. To fulfill his…

A: As you have asked a multiple subpart question, we will answer the first three subparts for you. To…

Q: PART B.) George is loaned $100,000 in Year 0. Approximately (round up to the nearest year) many…

A: Any sum borrowed to meet specific personal or business funding needs is recognized as a…

Q: Implied interest rate and period Consider the case of the following annuities, and the need to…

A: Loans ar paid by equal periodic payments and these payments carry the payment for interest and…

Q: Mr. Herymann bought a house for Rp. 500 million on credit for 5 years. Bank BNI offers mortgages…

A: Mortgages: When a house is purchased on credit, the home buyer is required to contribute a certain…

Q: Mr. Nina borrows $425,000 from the bank at 3.5% per year interest over a 30-year period. He can make…

A: A balloon payment refers to a large, lump sum payment that is typically made at the end of a loan…

Q: J. D. Homeowner has just bought a house with a 20-year, 9%, $70,000 mortgage on which he is paying…

A: Given information: Mortgage loan is $70,000 Interest rate is 9% Maturity is 20 Monthly payment is…

Q: Pedro borrows P300,000.00 from lender ABC today at 12% compounded monthly. To fulfill his obligation…

A: Loan Amount = P 300,000 Interest rate = 12% Time Period = 6 Months

Q: The problem describes a debt to be amortized. (Round your answers to the nearest cent.) A man buys…

A: Loans are to be paid by the periodic payments that carry the payment for the principal amount and…

Question

100%

9
10
8. Your brother-in-law borrowed $2,000 from you 4 years ago and then disappeared. Yesterday he returned and
expressed a desire to pay back the loan, including the interest accrued. Assuming that you had agreed to charge him 10%
annual interest and he wishes to make 5 equal annual payments beginning one year from now, how much will he need to
pay you annually in order to pay off the debt? (Assume that the loan continues to accrue interest at 10% per year.)
11
12
13
14
15
16
17
10
10. So you can retire early, you have decided to start saving $500 a month starting one month from now. You plan to
retire as soon as you can accumulate $1 million. If you can earn 5 percent APR with monthly compounding on your
savings, how many years will it be before you can retire?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Introduction,

VIEW

Calculation is as follow:

VIEW

Answer

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Classification and Prediction of Corporate Financial Distress

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Stephen just purchased a home for $151,500. A morgage company has approved his loan ‘application for a 30 year fixed rate loan at 5.00%. Stephen has agreed to pay 25% of the purchase price as a down payment.[f Stephen made the same loan for 20 years, How much Interest would he save?
Mark just took out a loan from the bank for $3,700.00. He plans to repay this loan by making a special payment to the bank of $800.00 in 4 years and by also making equal, regular annual payments of X for 5 years. If the interest rate on the loan is 9.73 percent per year and he makes his first regular annual payment in 1 year, then what is X, Mark's regular annual payment? O $969.33 (plus or minus $1) O $824.76 (plus or minus $1) O $1,178.91 (plus or minus $1) $1,113.89 (plus or minus $1) O none of the answers are within $1 of the correct answer
The problem describes a debt to be amortized. (Round your answers to the nearest cent.) A man buys a house for $350,000. He makes a $150,000 down payment and amortizes the rest of the purchase price with semiannual payments over the next 5 years. The interest rate on the debt is 10%, compounded semiannually. (a) Find the size of each payment. $ (b) Find the total amount paid for the purchase. $ (c) Find the total interest paid over the life of the loan. $
Emma plans to loan $1,000 to her friend, who will pay a simple interest rate of 5.8% every year for the loan. If no payments are made and no further borrowing occurs between them for 13 years, then how much money will Emma' s friend owe her? $1,061.36 $1,754.00 $2,081.20 $158.00 Now, assume that Emma's friend volunteers to pay compound interest instead of simple interest for her loan. If interest is accrued at 5.8% compounded annually, all other things being equal, how much money will Emma's friend owe her in 13 years? $2,081.20 $1,058.00 $120.71 $ 1,754.00 Emma has another investment option in the market that pays 5.8% nominal interest, but it's compounded quarterly. Keeping everything else constant, how much money will Emma have in 13 years if she invests $1,000 in this fund? $158.00 $129.72 $2,114.01 $1,059.27
A man plans to take a vacation in 4 years. He wants to buy a certificate of deposit for $1200 that he will cash in for the trip. What is the minimum annual interest rate he must obtain on the certificate if he needs at least $1700 for the trip? Assume that the interest on the loan is computed using simple interest The rate he must obtain is ___%
Erica borrowed money from Charles an amount of 58,744 and promise to pay at the end of second and fourth year at a simple interest rate of 15.198%. The second payment is 30% more than the first one. How much is the first payment? How much is the second payment?
An individual wishes to purchase a house that is selling for $200,000. The person has $50,000 they can use as a down-payment towards the purchase of the house. The bank is offering a 5-year Term with an interest rate of 10% compounded monthly. The mortgage amount will be amortized over a period of 10-years. What are the individual's monthly payments? How much of the original amount of the mortgage is still outstanding at the end of the 5-year Term of the mortgage disçussed in Part 1 of this problem?
The problem describes a debt to be amortized. (Round your answers to the nearest cent.)A man buys a house for $330,000. He makes a $150,000 down payment and amortizes the rest of the purchase price with semiannual payments over the next 9 years. The interest rate on the debt is 10%, compounded semiannually. (a) Find the size of each payment.$ (b) Find the total amount paid for the purchase.$ (c) Find the total interest paid over the life of the loan.$
David obtained a fully amortizing loan 8 years ago for $12,0000 at 8% for 30 years. Mortgage rates have dropped in such a manner so as to provide a loan for 22 years at 6.5%. There is no prepayment penalty on the mortgage balance of the original loan, but 2 points will be charged on the new loan and other closing cost will be $3000. All payments are monthly. How much does David need to borrow if he decides to borrow only outstanding loan balance? Is refinancing a good option if David decides to repay the full amount of loan in 5 more years? How would your answer for part 2a change if David decides to borrow outstanding loan balance and other refinancing costs? Would your answer for part 2b change if David decides to keep the loan for full term of the loan?
Mr. Rabutan borrowed P150,000. He agrees to pay the principal plus interest by paying an equal amount of money for 2 years. What should be his monthly payment if interest is 5% compounded annually? a. P8,895.45 b. P6,573.25 c. P5,786.25 d. P4,458.52
Mr. Tramp made a mortgage 5 years ago for $85, 000 at 8.25% interest and a 15 year term. Rates have now risen to 10% for an equivalent loan. Mr. Tramps lender is willing to discount the loan by $2, 000 if he will prepay the loan. What rate of return would Mr. Tramp receive by prepaying the loan?(A)7.83% (B) 10.24% (C) 14.32% (D) 9.14%
d) Sean rents out his three bedrooms flat for R5 000 per month, payable in advance. All his rental proceeds are deposited into a bank account that earns interest at a rate of 11% per annum compounded monthly. If no withdrawals are made from the bank account, what will be Sean's balance on this bank account 8 years from now

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS