S has taken 30-year mortgage loan of $220,000, 12 years ago at 6% interest rate monthly compounded. Present value of an annuity is the current value of future payment or the present value of a series of future periodic payments made at the end of each payment period. P V = P M T [ 1 − 1 ( 1 + r ) n r ] Here, The present value is “ PV ”. The periodic payments are “ PMT ”. The interest rate is “ r ”. The maturity period of number of years is “ n ”.

Question

Want to see the full answer?

Answer 1

Question

Chapter 4, Problem 24PROB

Summary Introduction

S has taken 30-year mortgage loan of $220,000, 12 years ago at 6% interest rate monthly compounded.

Present value of an annuity is the current value of future payment or the present value of a series of future periodic payments made at the end of each payment period.

PV=PMT[1−1(1+r)nr]

Here,

The present value is “PV”.

The periodic payments are “PMT”.

The interest rate is “r”.

The maturity period of number of years is “n”.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Lara Fredericks is interested in two mutually exclusive investments. Both investments cover the same time horizon of 5 years. The cost of the first investment is $9900, and Lara expects equal and consecutive year-end payments of $3400. The second investment promises equal and consecutive payments of $4100 with an initial outlay of $12500 required. The current required return on the first investment is 8.4 %, and the second carries a required return of 10.4 %.a. What is the net present value of the first investment?b. What is the net present value of the second investment?c. Being mutually exclusive, which investment should Lara choose? d. Which investment is relatively more risky? Explain.

What are some of the characteristics of a firm with a long operating cycle?

About this Assignment For this Corporate Finance 301 assignment, you will submit a research paper that analyzes the types of organizational business structures. You will apply knowledge of business structure concepts as acquired in the course. The research paper should follow APA formatting style. Project Prompts The written research paper should be at least 1,000 to 1,200 words in length and should include four sections based on the business structures studied throughout the course. Define each business structure, compare the corporate finance strategies of the four business structures, discuss the advantages and disadvantages of each business structure, and how each varies in taxation. Research Paper Sections ⚫ Sole Proprietorship ⚫ Partnership • Corporation ⚫ Limited Liability Company (LLC)