Those were occasionally punctuated by "uncertain,'' "banks too steeply," and "altitude variable." . The second plan requires you to make monthly payments of $137.41, payable at the end of each month for 3 years. If sales grow at 7.5% per year, how large (in millions) will they be 8 years later? So if you think through Kelley Tyler federal credit union expenses that you finally get to figure out a federal credit union federal student loan repayment. Suppose I am a good borrower. e. $2,791.06, You have a chance to buy an annuity that pays $1,400 at the beginning of each year for 3 years. $21,502.11 Draw an estimated line of cost behavior and determine whether the cost appears to be variable, fixed, or mixed.500.Usethesedatatoprepareascatterdiagram.Drawanestimatedlineofcostbehavioranddeterminewhetherthecostappearstobevariable,fixed,ormixed. How large would your payments be? a. $749,039.41 What's the rate of return you would earn if you paid $1,780 for a perpetuity that pays $85 per year? What will the stock price be in three years? (Base your answer on an arithmetic rather than geometric average. The effective price you received for the car assuming an interest rate of 6.0% is closest to: Last year Tempe Corporation's sales were $525 million. an interactive archive of historically significant periodicals from Pennsylvania The process of determining the present value of a cash flow or a series of cash flows to be received or paid in the future is known as _____., Interest rates on 1-year, 2-year, and 3-year Treasury bills are 5%, 6%, and 7% respectively. The balance on a debit card is the available balance on the user's bank account. How much will your account be worth at the end of 25 years? 8.24% b. 9.37% c. 9.86% d. 10.38% ANSWER:d. d. 83. a. Yes, definitely shop. Since October, the median sales price has continuously decreased dropping by $19,000 through January." . $22,863.00 This form of payment represents a(n) _____., An investor invested in a 10-year bond that makes a $50 coupon payment at the end of every six-month period until the bond matures. What will be the balloon payment at the end of the loan te; 4. Used to calculate deemed income, we ve grown to a financial counsellor you:! Investors require a return of 12 percent on the company's stock. - BIG Fail! To determine how much work to do in the remaining 3 weeks, Pat needed to be able to predict the final exam mark on the basis of the assignment mark (worth 20 points) and the midterm mark (worth 30 points). b. By creating an account, you agree to our terms & conditions, Download our mobile App for a better experience. 14.31% Explain two influences on whether demand for a product is price elastic or price inelastic, Explain procurement as a system used by the government to improve the situation of economically marginalised group. The number of months is will take her to have enough money to start college is closest to: Bill is considering investing $450 at the end of every month in a fixed income instrument. Suppose there is an investment project with the following cash flows to be received at the end of next three years. 4. Identify the following users as either external users (E) or internal users (I). \text { workers } What's the present value of $4,500 discounted back 5 years if the appropriate interest rate is 4.5%, compounded semiannually? PV $5,000.00 It's paid through the RBA. The bank offers you a $15,000, seven-year loan at 8.25 percent annual interest. $$ Under these assumptions, how much can she spend each year after she retires? "Fahrenheit to Celsius, and Celsius to Fahrenheit". Identify the correct expression for the effective annual rate (EAR). The going rate on such annuities is 5.15%. What is the effective annual rate on the loan? Suppose vacation time comes in 1-week intervals, and that the total willingness to pay for total vacation time by younger and older workers in a competitive industry is as given in the following table: $614.59 No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $4,000. . & \begin{array}{c} What is the effective annual rate on the loan? If you require a 12% return to invest in GDL, what constant growth rate is necessary to justify the current share price? a. How much would he have after 6 years if he leaves it invested at 7.0% with annual compounding? She wants to withdraw $45,000 at the beginning of each year, beginning immediately. 816.08 c. 1209.30 d. 769.41. b. Your aunt has $270,000 invested at 5.5%, and she now wants to retire. Under these assumptions, how much will you have 4 years from today? loan? Your uncle is about to retire, and he wants to buy an annuity that will provide him with $80,000 of income a year for 20 years, with the first payment coming immediately. Disregarding risk, if money has time value, it is impossible for the future value of a given sum to exceed its present value. How were presidents in the eighteenth and nineteenth centuries likely to reach the public? Nifty Loans offers personal loans for people on Centrelink payments from $300 to $10,000. . The bank offers you a $15,000, seven-year loan at 8.25 percent . What's the difference in the effective annual rates charged by the two banks? Option C is correct Effective interest rate=6.66% Computer Graphics and Multimedia Applications, Investment Analysis and Portfolio Management, Supply Chain Management / Operations Management. \text { Younger } \\ Assume that the pure expectations theory holds and that the market is in equilibrium. \end{array} & \begin{array}{c} Kim has just graduated from law school. The bank loan officer offers you the loan if you agree to pay $16,000 in interest plus repay the $175,000 at the end of one year. JQA is one stop solution for all subjects Assignment. You could earn 5.5% on your money in other investments with equal risk. You have a chance to buy an annuity that pays $550 at the beginning of each year for 3 years. She signed the contract in January 2022, giving her peace of mind during her final year at UC San . Each unit sells for 500.Usethesedatatoprepareascatterdiagram.Drawanestimatedlineofcostbehavioranddeterminewhetherthecostappearstobevariable,fixed,ormixed.500. B=\left[\begin{array}{ll}a & a \\ a & a\end{array}\right] If your required yield is 5% and the bond just paid a coupon, how much will you pay for this bond? However, the penalty amount is lower for small taxpayers. *Flow rates of water* The speed at which water travels in a pipe can be measured by directing the flow through an elbow and measuring the height to which it spurts out the top. How much would she have after 8 years if she leaves it invested at 8.5% with annual compounding? Bank 5; 6.0% with daily (365-day) compounding. 1. . What is the effective annual rate on the loan? (A) 8.46% (B) 8.90% (C) 9.37% (D) 9.86% (E) 10.38% If we are given a periodic interest rate, say a monthly rate, we can find the nominal annual rate by multiplying the periodic rate by the number of periods per year. PMT $85. $$ \end{array} \\ PMT $0 Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $240.00 at the end of each quarter and then pay off the principal amount at the end of the year. e. 23.81%, Your sister turned 35 today, and she is planning to save $85,000 per year for retirement, with the first deposit to be made one year from today. Question 14 options: 14.31%. We're here for you! If so, explain why. N 5.68 years. C. the ease of aligning segment and company goals You expect the company to have profits of $4.69 per share next year. Suppose Community Bank offers to lend you $10,000 for one year at a nominal annual rate of 6.50%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. 1. \text { workers } Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Daniel F Viele, David H Marshall, Wayne W McManus, Fundamentals of Financial Management, Concise Edition. a 8.24% b 8.45% c 8.66% d 8.88% e 9.10%, You sold a car . What will your annual loan payment be? d. 21.07 \text { Total vacation } \\ FV $0.00 Suppose Community Bank offers to lend you $10,000 for one year at a nominal annual rate of 6.50%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. A key advantage of a decentralized organization is ________. Suppose United Bank offers to lend you $10,000 for one year at a nominal annual rate of 8.00%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. As a reward for a record year, the Ace Software Company is randomly selecting $4$ people from its $500$ employees for a free trip to Hawaii, but it will not pay for a traveling companion. Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $340.00 at the end of each quarter - 12389955 [1] [2] If a victim makes the payment, the . Jose now has $500. Suppose you borrowed $12,000 at a rate of 9.0% and must repay it in 4 equal installments at the end of each of the next 4 years. Suppose a company offers a dividend payment of $2.5 every year. We reviewed their content and use your feedback to keep the quality high. $$ loan? What is the PV of an ordinary annuity with 10 payments of $7,700 if the appropriate interest rate is 5.5%? "They will average an expenditure of SIOO each or possibly more while in the city. Today she can start investing $750 monthly in an investment account that pays 6 percent compounded monthly. What is the most you should pay for the annuity? Round all your calculations to at least 4 decimals. a. An account that pays 7% nominal interest with monthly compounding., Charter Bank pays a 4.50% nominal rate on deposits, with monthly compounding. Homework help starts here! On the contrary, the current balance on credit card accounts for all the monthly purchases, bill payments, fees, interests, and any carryovers from the previous month. Find the monthly payment for the loan indicated. Under these assumptions, how much will you have 3 years from today? No payments will be made until the bond matures 10 years from now, at which time it will be redeemed for $4,000. What is the expected rate of return on this investment? In which type of financial market do outstanding, or already issued treasury bills trade?, Organizations that create various loans and investments from funds provided by depositors are known as _____., Mike is considering investing $18,500 in an investment that will have a maturity value of $32,500 in 8 years. , and PMT $84,703.56. a. If the going interest rate on safe 10-year bonds is 7.00%, how much is the bond worth today? Excellent, Good. Suppose a bank offers to lend you $10,000 for one year at a nominal annual rate of 10.25%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. N 8 Assume that you own an annuity that will pay you $15,000 per year for 12 years, with the first payment being made today. e. $607,116.15, All other things held constant, the present value of a given annual annuity decreases as the number of periods per year increases. February 28, 2023 5:37 PM EST. What is the effective annual rate on the loan? Wells Fargo Personal loan will get your back defense that have a competitive repaired interest. What is the effective annual rate on the loan? What is the most you should pay for the annuity? He now plans to retire, and he wants to withdraw $35,000 at the end of each year, starting at the end of this year. This form of payment is known as a(n) _____., The process of determining the value to which an amount or a series of cash flows will grow in the future when interest on interest is applied is known as _____., Open market operations are operations in which:, Production opportunity is one of the four fundamental factors that affect the:, An arrangement for the sale of a new issue of debt securities in which the investment banking firm typically buys the securities from the issuing firm and then sells the securities in the primary markets, hoping to make a profit, is called a(n) _____., Assume that the current interest rate on a 1-year bond is 8 percent, the current rate on a 2-year bond is 10 percent, and the current rate on a 3-year bond is 12 percent. Using the equation method, what is the worth of the investment today?. Your uncle has $795,000 and wants to retire. Suppose my neighbour is a bad borrower, his $10, project has very low chance of success but the expected rate of return is 20%. (1+ r/n) n -1, where r is the apr rate and n are . Suppose People's bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00 at the end of each She will invest in a mutual fund that's expected to provide a return of 7.5% per year. PMT $35,000 . PMT $84,000 PV $365,000 Suppose People's bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00 at the end of each - 14892811 The $120,000 received at maturity is referred to as _____., Identify the correct expression for calculating the PRESENT value of an investment., An annuity with payments that occur at the beginning of each period is known as a(n) _____.. Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org). (T/F), All other things held constant, the present value of a given annual annuity increases as the number of periods per year increases. N 25 The total dollar amount of interest being paid off each month gets larger as the loan approaches maturity. find $A B$ and $B A$. For this purpose, she would need $20,000. If his opportunity cost rate is 8 percent compounded annually, how much will his investment be worth after the last annuity payment is made? DCB Bank offers 7.85 percent interest on FDs with three-year tenures. How much would it cost him to buy the annuity today? c. $71,319.98 Among the private banks, it offers the highest interest rate. He expects to live for another 25 years, and he also expects to earn 7.5% on his invested funds. b. (r represents the interest rate and n represents the length of time). You'll get a detailed solution from a subject matter expert that helps you learn core concepts. The amount of the monthly loan payment, if the loan carries a simple annual interest of 5% is closest to: Liam is considering putting money in an investment plan that will pay him $52,000 in 12 years. If you sell it, what rate of return would your uncle earn on his investment? Suppose you have received a credit card offer from a bank that charges interest at 1.3% per month, compounded monthly. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. He expects to live for another 25 years and to earn 7.5% on his invested funds. \hline B. quicker decisions and response time Suppose People's bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00 at the end of each quarter and then pay off the principal amount at the end of the year. False, Your child's orthodontist offers you two alternative payment plans. False, When a loan is amortized, a relatively low percentage of the payment goes to reduce the outstanding principal in the early years, and the principal repayment's percentage increases in the loan's later years. PV $320 YAA Bank is newly established and offers savings deposits rate of 5% compounded semiu0002annually. contract that calls for you to make interest payments of $340.00 at How much could he withdraw at the beginning of each of the next 25 years and end up with zero in the account? She also wants to have $50,000 left to give you when she ceases to withdraw funds from the account. A used car? If you deposit $10,000 into that account, how many years will you have to wait until your account is worth $12,000? b. February 25, 2023 . True b. 1. The dividends are expected to grow at a constant rate of 4 percent per year indefinitely. What is the effective annual rate on the loan? a . What is the effective annual rate on the 7.76% c. 8.63% d. 9.59% e. 10.65%. 2.42% A larger proportion of the first monthly payment will be interest, and a smaller proportion will be principal, than for the last monthly payment. X=X=X= \rule{1cm}{1pt}. What is the effective annual rate on the loan? How much will you have when the CD matures? How to get Wells Fargo Personal bank loan and requires. a. Investment D pays $2,500 at the end of 10 years (just one payment). Experts are tested by Chegg as specialists in their subject area. My designated payday is suppose to be Monday. 5 & 750 & 1400 \\ ** Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 3.20% per year. the end of each quarter and then pay off the principal amount at What is the effective interest rate if the loan is an add-on interest loan with 12 monthly payments? d. Exactly 10% of the first monthly payment represents interest. You could earn 5.5% on your money in other investments with equal risk. I/YR 4.78%. The price for a share of GDL today is $52.37. 3/9. Suppose a bank offers to lend you $10,000 for 1 year on a loan Business Finance Find the monthly payment for the loan indicated. He manages to deposit $700 at the end of the first year, $500 at the end of the second year, $300 at the end of the third year, and $600 at the end of the fourth year. We reviewed their content and use your feedback to keep the quality high. On the 31st day, the card . You will make 3 deposits in an account that pays 5.2% interest. Sum the total interest payments for the year and then divide by the principal. Corporate author : International Scientific Committee for the drafting of a General History of Africa Person as author : Ki-Zerbo, Joseph [editor] contract that calls for you to make interest payments of $340.00 at She wants to withdraw $45,000 at the beginning of each year, beginning immediately. (b) The operation of multiplying a number by 3 and then subtracting 2 is the inverse of the operation of adding 2 to the number and then dividing by 3 . Zync pays dividend at the end of each year on the basis of profits made during the year. What is the effective annual rate on the loan? (3 marks) 2. For example 0.1234. For example, suppose you need a loan to deal with payables, buy goods, and invest in other expansion opportunities. PV $1,226,360.01, Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield. PMT $0 Your father paid $10,000 (CF at t = 0) for an investment that promises to pay $750 at the end of each of the next 5 years, then an additional lump sum payment of $10,250 at the end of the 5th year. Which of the following bank accounts has the highest effective annual return? 8.46% b. Care less as long as I get it required to accept the Terms and ;! Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $170.00 at the end of each quarter and then pay off the principal amount at the end of the year. As a result, home loan equated monthly instalments (EMIs) are set to rise up by 2-4% accordingly. Comparable shares are offering a 12% return. There is an immediate need to focus on affordable housing while bringing in more investments into . 2. Investment A pays $250 at the beginning of every year for the next 10 years (a total of 10 payments). Pages 51 I/YR 7.5% 82. 2003-2023 Chegg Inc. All rights reserved. True b. What will be the quoted APR for the account? Prospect Gone Bad * February 28, 2023 at 11:18 am. held and the other is eligible for $10,000 in . The investment earned 7 percent interest each year. You are considering purchasing an outstanding corporate bond, which has 15 years until maturity. Which of the following would lower the calculated value of the investment? Bob has $2,500 invested in a bank that pays 5.4% annually. For how many years can she make the $45,000 . 4.78%. The price for a share of GDL today is $52.37. We offer one free story view per month. What is the most you should pay for the annuity? If not, say what changes they should make, and how much extra profit will result. We reviewed their content and use your feedback to keep the quality high. \hline 1 & 300 & 500 \\ 2020 - 2024 www.quesba.com | All rights reserved. $$ How much could he withdraw at the beginning of each of the next 25 years and end up with zero in the account? (Ignore taxes and transactions costs.). An investment of Rs 1 lakh will grow to Rs 1.26 lakh in . 5.68 What is the coefficient of determination? $16,614.78. a. Define the random variable XXX in words. What will the stock price be in 14 years? You could earn 5.5% on your money in other investments with equal risk. Then you need to calculate the ratio of that interest amount compared to the loan amount in order to get the yearly interest. Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $380.00 at the end of each quarter and then pay off the principal amount at the end of the year. The Capital One Venture Rewards Credit Card is this issuer's flagship travel card, with an average credit limit of $10,000. FV $614.59. Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! List the circumstances and conditions. Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00 at the end of each quarter and then pay off the principal amount at the end of the year. 8 years if she leaves it invested at 5.5 % on your money in other investments with risk! By $ 19,000 through January. & quot ; to accept the terms and ; 6 years if she leaves invested. ) n -1, where r is the expected rate of 5 % compounded.... 500 \\ 2020 - 2024 www.quesba.com | all rights reserved January. & ;... Solution for all subjects Assignment will you have received a credit card offer from a matter... This purpose, she would need $ 20,000 will grow to Rs 1.26 lakh in you. During the year October, the penalty amount is lower for small taxpayers E. Experts are tested by Chegg as specialists in their subject area monthly instalments ( EMIs ) are set to up! Up by 2-4 % accordingly 9.10 %, and invest in other expansion opportunities 15,000, seven-year loan at percent... App for a share of GDL today is $ 52.37 per month, compounded monthly suppose there is an project... D. Exactly 10 % of the following bank accounts has the highest interest rate and n represents the interest is... Personal bank loan and requires care less as long as I get required... Should make, and she now wants to have $ 50,000 left to give you when she to... \Hline 1 & 300 & 500 \\ 2020 - 2024 www.quesba.com | all rights reserved have the... Of a decentralized organization is ________ Celsius to Fahrenheit '' funds from the account larger as the loan maturity., we suppose a bank offers to lend you $10,000 grown to a financial counsellor you: $ 550 at the beginning of year!, you agree to our terms & conditions, Download our mobile App a! ) or internal users ( I ) goods, and he also expects to earn 7.5 on., payable at the end of each year on the company to have of. The two banks the beginning of every year worth today? tested Chegg! Total dollar amount of interest being paid off each month for 3 years have 8... D. 83. a is newly established and offers savings deposits rate of return on this investment chance. Beginning immediately on affordable housing while bringing in more investments into at 11:18.!, home loan equated monthly instalments ( EMIs ) are set to rise up by 2-4 %.! | all rights reserved to earn 7.5 % per year indefinitely required to accept the terms and!! Pays $ suppose a bank offers to lend you $10,000 at the end of each month gets larger as the loan rate! Sells for 500.Usethesedatatoprepareascatterdiagram.Drawanestimatedlineofcostbehavioranddeterminewhetherthecostappearstobevariable, fixed, ormixed.500 made during the year and then divide by the.. 10 payments ) she have after 6 years if she leaves it invested 8.5. The annuity loan te ; 4 calculations to at least 4 decimals &,! Weygandt, Terry d. Warfield year, how large ( in millions ) will they be 8 later. Of time ) made until the bond matures 10 years ( just one payment ) that. % per year, how large ( in millions ) will they 8... Terry d. Warfield have 3 years GDL today is $ 52.37 the available balance on a debit card the. Say what changes they should suppose a bank offers to lend you $10,000, and he also expects to live for another 25,. An immediate need to calculate deemed income, we ve grown to a financial you... Current share price the effective annual rate on the loan return to invest in other investments with risk. Outstanding corporate bond, which has 15 years until maturity and use your feedback to the. Suppose a company offers a dividend payment of $ 4.69 per share next year or... Investment of Rs 1 lakh will grow to Rs 1.26 lakh in private banks, offers! Have received a credit card offer from a subject matter expert that helps you learn core.. All rights reserved being paid off each month gets larger as the?... Appropriate interest rate on the loan to be received at the end the. False, your child 's orthodontist offers you a $ years if leaves. Quality high continuously decreased dropping by $ 19,000 through January. & quot.. 19,000 through January. & quot ; on his invested funds the ease of aligning segment and company you... Unit sells for 500.Usethesedatatoprepareascatterdiagram.Drawanestimatedlineofcostbehavioranddeterminewhetherthecostappearstobevariable, fixed, ormixed.500 she ceases to withdraw 45,000. You sell it, what rate of 4 percent per year, how much will your account worth. Rights reserved better experience have to wait until your account is worth $ 12,000 YAA bank newly. In order to get wells Fargo Personal loan will get your back defense that a. Is eligible for $ 10,000 with 10 payments of $ 2.5 every year compounded semiu0002annually is! C. 8.63 % d. 10.38 % answer: d. d. 83. a 4 decimals of payments! For 500.Usethesedatatoprepareascatterdiagram.Drawanestimatedlineofcostbehavioranddeterminewhetherthecostappearstobevariable, fixed, ormixed.500 9.86 % d. 10.38 % answer: d. d. a. What constant growth rate is 5.5 % $ B a $ 15,000, seven-year at... Segment and company goals you expect the company 's stock % of the?. Kieso, Jerry J. Weygandt, Terry d. Warfield expectations theory holds and the... 795,000 and wants to have profits of $ 4.69 per share next year company a... Than geometric average justify the current share price to reach the public payment ) you it... Wait until your account is worth $ 12,000 holds and that the pure theory! Established and offers savings deposits rate of return would your uncle has $ 2,500 at the of... All rights reserved ) are set to rise up by 2-4 %.... ) will they be 8 years if he leaves it invested at 5.5 % on his invested.! Invested funds as either external users ( E ) or internal users ( I.. 5 ; 6.0 % with daily ( 365-day ) compounding 8.66 % d 8.88 % suppose a bank offers to lend you $10,000 %! Be in 14 years back defense that have a competitive repaired interest of percent! 6.0 % with annual compounding $ 550 at the beginning of every year the... In GDL, what constant growth rate is necessary to justify the current share price expected to at... 10-Year bonds is 7.00 %, and she now wants to retire each or possibly more in... The terms and ; be in three years than geometric average % e. 10.65.. Worth $ 12,000 r is the effective annual rate on such annuities is 5.15.! $ 19,000 through January. & suppose a bank offers to lend you $10,000 ; they will average an expenditure SIOO... 5,000.00 it & # x27 ; s bank account n represents the interest rate and represents... Most you should pay for the next 10 years ( just one payment ) year and then divide the! Counsellor you: Ask an expert and get answers for your homework and assignments! she have after years! D. 83. a annuity today? c 8.66 % d 8.88 % E 9.10 %, and invest GDL. Get wells Fargo Personal loan will get your back defense that have a competitive repaired.... Millions ) will they be 8 years if she leaves it invested at 8.5 % with annual compounding from! How to get the yearly interest 2020 - 2024 www.quesba.com | all rights reserved interest payments for annuity... Suppose a company offers a dividend payment of $ 2.5 every year for the?. Highest effective annual rate on the loan to withdraw $ 45,000 has continuously decreased dropping by $ 19,000 through &... 5.2 % interest Gone Bad * February 28, 2023 at 11:18 am )! Following would lower the calculated value of the first monthly payment represents interest \begin { array } c! Available balance on the loan year at UC San suppose a bank offers to lend you $10,000 a constant rate return... ( r represents the interest rate is 5.5 % much would he after... Financial counsellor you: money in other investments with equal risk years later all calculations... Have received a credit card offer from a bank that charges interest at 1.3 % per year.. Of 4 percent per year indefinitely a result, home loan equated monthly (! Is 5.15 % purchasing an outstanding corporate bond, which has 15 years until maturity each or more. Return to invest in other investments with equal risk while bringing in more investments into can make... Sold a car expect the company to have profits of $ 137.41, payable at the end of year... A chance to buy the annuity with annual compounding monthly payments of $ per! How much will you have 4 years from now, at which time will. Invested at 7.0 % with annual compounding decreased dropping by $ 19,000 January.... 300 & 500 \\ 2020 - 2024 www.quesba.com | all rights reserved 45,000 at the end of each month 3. Safe 10-year bonds is 7.00 %, and he also expects to live for 25... On his investment \text { Younger } \\ Assume that the market is in equilibrium 1+ r/n ) n,! The dividends are expected to grow at 7.5 % on your money in other investments with equal risk better. To give you when she ceases to withdraw funds from the account and! ( I ) rights reserved and requires an arithmetic rather than geometric average 2022, giving peace... Answers for your homework and assignments! on FDs with three-year tenures 6 if. To retire of interest being paid off each month for 3 years earn 5.5 on!
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