A couple sold their home. In addition to a cash down payment, they financedthe remaining balance for the buyer. The loan will be paid off by monthlypayments of $300 for 5 years. The couple decides to sell the loan to a localbank. The bank will buy the loan, based on 1% per month interest. How muchwill the bank pay the couple for the loan?Select one:O a. 35648.74O b. 3397.40O c. 13486.51O d. 1456.03O e. 31468.53You deposit $8000 in year 1, $7500 in year 2, and amounts decreasing by$500 per year through year 10. At an interest rate of 10% per year, determinethe annual worth equivalent through year 1 to 10.Select one:O a. 10282.48O b. 6137.27O c. 4540.89O d. 5717.52O e. 9862.73

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O a. 35648.74 O b. 3397.40 O c. 13486.51 O d. 1456.03 O e. 31468.53 You deposit $8000 in year 1, $7500 in year 2, and amounts decreasing by $500 per year through year 10. At an interest rate of 10% per year, determine the annual worth equivalent through year 1 to 10. Select one: O a. 10282.48 O b. 6137.27 O c. 4540.89 O d. 5717.52 O e. 9862.73

O a. 35648.74 O b. 3397.40 O c. 13486.51 O d. 1456.03 O e. 31468.53 You deposit $8000 in year 1, $7500 in year 2, and amounts decreasing by $500 per year through year 10. At an interest rate of 10% per year, determine the annual worth equivalent through year 1 to 10. Select one: O a. 10282.48 O b. 6137.27 O c. 4540.89 O d. 5717.52 O e. 9862.73

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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A couple sold their home. In addition to a cash down payment, they financed the remaining balance for the buyer. The loan will be paid off by monthly payments of $300 for 5 years. The couple decides to sell the loan to a local bank. The bank will buy the loan, based on 1% per month interest. How much will the bank pay the couple for the loan? Select one: O a. 35648.74 O b. 3397.40 O c. 13486.51 O d. 1456.03 O e. 31468.53
A few years ago a couple purchased an office space by financing RA for n years, paying periodic installment of Rp with an interest of r% compounded bimonthly (every 2 months). They have made t payments and wish to know how much they owe on the mortgage at the end of t payments, which they are considering paying off with an inheritance they received. 1. Construct a mathematical model to illustrate the value owed on the loan after t payments. 2. Give an explicit formula for computing the current balance on the loan account after n periods. 3. If the couple signed the contract by financing R80000 for 10 years, paying periodic installments of R1880 with an interest of 18% compounded binmonthly. What is the current value on the mortgage after 6 months?
(1)You decide to purchase a new home and need a $100000 mortgage. You take out a loan from the bank that has an interest rate of 7%. What is the yearly payment to the bank to pay off the loan in 20 years? (2) Using T-accounts show what happens to reserves at Security National Bank if one individual deposits $1000 in cash into her checking account and another individual withdraws $750 in cash from her checking account.
Your are in need of cash and turn to your cousin, who offered to lend you some money. You decide to borrow $1450 and agree to pay back $1660 in two years? Rate of interest charged by cousin ?
A friend asks to borrow $48 from you and return will pay you $51 in one year. If your bank is offering a 6.5% interest rate on deposits and loans: a. How much would you have in one year if you deposited the $48 instead? b. How much money could you borrow today if you pay the bank $51 in one year? c. Should you loan the money to your friend or deposit it in the bank? D
Jino sold his house. In addition to cash, he took a mortgage on the house. The mortgage will be paid off by monthly payments of P12, 345 for 10 years. He decided to sell the mortgage to a local bank. The bank will buy the mortgage, but requires a 1% per month interest rate on their investment. How much will the bank pay for the mortgage? a) P 138,943.93 b) P 860,452.94 c) P 116,923.25 d) P 717,431.69
Leslie Mosallam, who recently sold her Porsche, placed $10,000 in a savings account paying annual com- pound interest of 6 percent. a. Calculate the amount of money that will accumulate if Leslie leaves the money in the bank for 1, 5, and 15 years. b. Suppose Leslie moves her money into an account that pays 8 percent or one that pays 10 percent. Rework part a using 8 percent and 10 percent. c. What conclusions can you draw about the relationship among interest rates, time, and future sums from the calculations you just did? use EXCEL to work this out and show the formula!
A friend asks to borrow $53.00 from you and in return will pay you $56.00 in one year. If your bank is offering a 5.7% interest rate on deposits and loans: a. How much would you have in one year if you deposited the $53.00 instead? b. How much money could you borrow today if you pay the bank $56.00 in one year? c. Should you loan the money to your friend or deposit it in the bank? a. How much would you have in one year if you deposited the $53.00 instead? If you deposit the $53.00 in the bank today, you will have $ in one year. (Round to the nearest cent.)
2. Jeffrey purchased a new car. He wishes to set aside enough money in a bank account to pay maintenance on the car for the first 5 years. It has been estimated that the maintenance cost is as follows: Yegr Maintenance Cost 1 P6720 8400 3 10,080 4 11,760 13,440 Assume the maintenance costs occur at the end of each year and that the bank pays 5% interest. How much should Jeffrey deposit in the bank now?
A couple buys a $190000 home, making a down payment of 17%. The couple finances the purchase with a 15 year mortgage at an annual rate of 3.88%. Find the monthly payment.$1157 ( This is what I came up with) I cant figure out how many payments if they increase it to 1200? If the couple decides to increase the monthly payment to $1200, find the number of payments.
A woman decides to purchase a $23000 car, and makes down payment of $3500. She arranges to borrow the remainder from a bank that will charge her 4.5% interest. She will make monthly payments for 4 years. a. Find her monthly payment amount b. determine the total amount she would pay for the car and the total amount of interest paid
Dan buys a property for $290,000. He is offered a 20-year loan by the bank, at an interest rate of 6% per year. What is the annual loan payment Dan must make? A. $35,396.93 B. $30,340.22 C. $25,283.52 D. $40,453.63

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