ASSIGNMENT 2 SQ2024

Question 1: Part A.  The current 10 year treasury note is approaching the important threshold of: a) 2.75% b) 2.95% c) 3.25% d) 2.0%   Part B.  In a real estate investment, you may want to obtain a mortgage. In so doing, which year would you expect to see the highest amount of principal pay-down (in a payment mix of principal and interest)? a) year 15 b) year 20 c) year 10 d) year 25Part C.  In a Fast Market, you would rather sell a stock using a: a) Market Order b) Market On Close Order c) Limit Order d) Market On Open OrderPart D. Given that equity markets are asymmetric in their respective moves, markets are said to take________________________  a) the slow grind higher into perpetuity b) the stairs down and the elevator up c) the stairs up and your mom home d) the stairs up and the elevator down     Part E. It is said that traders have come to employ the use of technical analysis potentially for all of the following reasons except:…

A Question 1 Suppose you are offered an investment that will allow you to triple your money in 8 years. What is the implied rate of interest? Retake question O 14.72 percent O 9.26 percent Not enough information 11.61 percent 8.50 percent

A Question 11 You deposit $5000 each year into your retirement account, starting in one year. If these funds earn an average of 5% per year over the 27 years until your retirement, what will be the value of your retirement account upon retirement? Your Answer: Answer Hide hint for Question 11 NOTICE THAT THE ONLINE FINANCIAL CALCULATOR HAS THE BUTTON FOR PAYMENTS MADE AT THE END OF THE PERIOD. THIS IS THE DEFAULT OF THE CALCULATOR, AND THE WORDS 'STARTING IN ONE YEAR' ARE JUST CONFIRMATION THAT YOU WANT THAT END OF THE PERIOD BUTTON SELECTED.

Q. 30 Assume you have secured a loan of $10,000 from a bank  which will be paid in one year. The fin bank has offered you $850 monthly installments, which equates to a 3.67% annualized interest rate. The monthly interest rate of 0.31% is the annual rate divided by 12. You know that the interest is paid at the end of the period, so you can multiply the opening balance by the monthly interest rate to get the interest paid. What is the opening balance for the month of June?   Month    Payment             Interest    Principal    Opening Balance    Closing BalanceJanuary    $850.00            $10,000.00    February    $850.00                March    $850.00                April    $850.00                May    $850.00                June    $850.00                July    $850.00                August    $850.00                September    $850.00                October    $850.00                November    $850.00                December    $850.00                Monthly Rate    0.31%…

Question 9 Suppose you need to accumulate GHȼ100,000 in 10 years. You plan to make a deposit in a bank now, at Time 0, and then make 9 more deposits at the beginning of each of the following 9 years, for a total of 10 deposits. The bank pays 6% interest, you expect inflation to be 2% per year, and you plan to increase your annual deposits at the inflation rate. How much must you deposit initially?

Question 3 A deposit of $330 earns the following interest rates:  8 percent in the first year. 6 percent in the second year. 5 percent in the third year.   What would be the third year future value? (Round your answer to 2 decimal places. Future Value

Question 2 The following interest rate structures are on offer by three independent banks: Tree Bank: 16% compounded annually; Branch Bank: 15% compounded monthly; Leaf Bank: 15% compounded quarterly. Note: Assume 365 days in a year. Q.2.2 Rank the three options from most preferable to least preferable to a borrower, with a reason why.

Present Value of $1 n/i 3.0% 1 0.97087 2 0.94260 3 0.91514 4 0.88849 5 0.86261 6 0.83748 7 0.81309 8 0.78941 0.76642 0.74409 0.55368 0.41199 10 20 30 Present Value of An Ordinary Annuity n/i 5.0% 6.0% 8.0% 3.0% 0.97087 4.0% 0.96154 1 0.95238 0.94340 0.92593 2 1.91347 1.88609 1.85941 1.83339 1.78326 3 2.77509 2.72325 2.67301 2.57710 2.48685 4 3.62990 3.54595 3.46511 3.31213 3.16987 5 4.57971 4.45182 4.32948 3.79079 4.21236 3.99271 5.07569 4.91732 4.62288 6 5.41719 5.24214 4.35526 7 6.23028 6.00205 5.78637 5.58238 5.20637 4.86842 8 7.01969 6.73274 6.46321 6.20979 5.74664 5.33493 9 7.78611 7.43533 7,10782 6.80169 6.24689 5.75902 10 8.53020 8.11090 7.72173 7.36009 6.71008 6.14457 11.46992 9.81815 8.51356 20 14.87747 3.59033 12.46221 30 19.60044 17.29203 15.37245 13.76483 11.25778 9.42691 2.82861 3.71710 4.0% 5.0% 6.0% 8.0% 10.0% 12.0% 0.94340 0.90909 0.89286 0.96154 0.95238 0.92593 0.92456 0.90703 0.89000 0.85734 0.82645 0.79719 0.88900 0.83962 0.79383 0.75131 0.71178 0.86384 0.82270…

QUESTION 16 Your financial advisor tells you that if you earn the historical rate of retum on a certain mutual fund, then in three years your $20,000 will grow to $23,152.50. What rate of interest does your financial advisor expect you to earn? a. 6 percent O b.5 percent OC. 8 percent O d. 7 percent

Question list Question 31 Question 32 K a. Use the appropriate formula to determine the periodic deposit. b. How much of the financial goal comes from deposits and how much comes from interest? Periodic Deposit Rate $? at the end of each month 5.5% compounded monthly Time 12 years Financial Goal $220,000 Click the icon to view some finance formulas. a. The periodic deposit is $ Question 33 ○ Question 34 (Do not round until the final answer. Then round up to the nearest dollar as needed.) b. $ of the $220,000 comes from deposits and $ comes from interest. (Use the answer from part (a) to find these answers. Round to the nearest dollar as needed.) Question 35

QUESTION 3 Suppose you deposit $2.500 in a CD paying 8% interest, compounded every other month. How much will you have in the account after 15 years? Round your answer to the nearest cent. below is an example how to do problem mple 4 A certificate of deposit (CD) is a savings instrument that many banks offer. It usually gives a higher interest rate, but you cannot access your investment for a specified length of ime. Suppose you deposit $3000 in a CD paying 6% interest, compounded monthly. How much will you have in the accbunt after 20 years? In this example, Pa-$3000 1=0.06 -12 the initial deposit 6% annual rate 12 months in 1 year since we're looking for how much well have after 20 N=20 years 0.06 So P 3000 1+ 12 3D%2993061(round your answer to the nearest penny) %3D Let us compare the amount of money earned from compounding against the amount you would carn from simple interest Yars Simple Interest 6% compounded (S15 per month)monthly 0.5% each month 33900 $4800 $5700 $4046 55…

Question 2 You are considering investing in two different investment options. The first option offers no return for the first three years, but afterward it offers to pay you $20,000 per year for four years. The second option offers to pay you $20,000 per year for three years and $30,000 in the fourth year. All payments are made at year-end. If a discount rate of 8% per annum is assumed, determine by using the present value the option that offers you a higher return.

Chapter 7 Financial Planning Exercise 4 Calculating single payment loan amount due at maturity Chase Boyd plans to borrow $8,000 for 6 years. The loan will be repaid with a single payment after six years, and the interest on the loan will be computed using the simple interest method at an annual rate of 10 percent. How much will Chase have to pay in six years? How much will he have to pay at maturity if he's required to make annual interest payments at the end of each year?

C Question 10 Assume that you have just purchased an investment at Year O that will give you payments of $100 in each of Years 1 through infinity (a perpetuity), and an additional $200 in each of Years 10 through infinity (a second perpetuity), and an additional $300 in each of Years 20 through infinity (a third perpetuity). Also assume that the appropriate nominal, annual discount rate is 9 percent. Given this information, determine the maximum that you should have been willing to pay for this investment. O $3,563.20 O $3,953.51 O $392.27 O $2,782.58 O $3,172.89

Question 4 John makes an Investment of 10900 Into an account that pays Interest compounded annually. In addition, he makes a yearly deposit of $170. At the end of 3 years, his balance is 15900. Determine the Interest he earned on the savings account. John annual percentage rate on his investment was Time Value of Money Solver Enter the given values. N: = 0 Number of Payment Periods 1:%= 0 Annual Interest Rate as a Percent PV: = Present Value 0 PMT: = 0 Payment FV: = in Solve Solve Solve Solve Salve 3 31

Determinants of Interest Rates Problem Illustration: (1 + nominal) 1 Solving for the Real Rate of Interest real (1 + inflation) You have managed to build up your savings over the three years following your graduation from college to a respectable P100,000 and are wondering how to invest it. Your banker says they could pay you 5% on your account for the next year. However, you recently saw on the news that the expected rate of inflation for next year is 3.5%. If you are earning a 5% annual rate of return but the prices of goods and services are rising at a rate of 3.5%, just how much additional buying power would you gain each year? Stated somewhat differently, what real rate of interest would you earn if you made the investment?

Problem 7-17 You have an IRA worth $250,000 and want to start to make equal, annual withdrawals (i.e., distributions from the account) for 25 years. You anticipate earning 4 percent on the funds. (To facilitate the calculation, assume an ordinary annuity.) Use Appendix D to answer the questions. Round your answers to the nearest dollar. How much can you withdraw each year?$   Since you are earning 4 percent on your investments, how much of the withdrawal consumes your investments?$   How much will be in the account at the end of the first year?$   How much do you earn on your investments in the account during the second year?$   How much will be in the account at the end of the second year?$

Quantitative Problem 1: You plan to deposit $2,300 per year for 5 years into a money market account with an annual return of 2%. You plan to make your first deposit one year from today. What amount will be in your account at the end of 5 years? Do not round intermediate calculations. Round your answer to the nearest cent. $   Assume that your deposits will begin today. What amount will be in your account after 5 years? Do not round intermediate calculations. Round your answer to the nearest cent. $

Question 4 A deposit of $730 earns interest rates of 9 percent in the first year and 12 percent in the second year.   What would be the second year future value? (Round your answer to 2 decimal places.) Future Value

Financila Management 1. PV of an ordinary annuity    Suppose you have an opportunity to buy an annuity that pays $1,000 at the end of each year for 5 years, at a          6% interest rate. What is the most you should pay for the annuity?  2. FV of an ordinary annuity   Suppose Sandra opens a bank account with 20 000 at the beginning of the year at an interest rate of 8%. If the       first deposit is made today and then 3 additional payments, how much would be accumulated after 5 years?  3. FV of an ordinary annuity due    An annuity makes 20 annual payments of $3,000 with the first payment coming today. What is the future value       of this as of 20 years from now if the interest rate is 8%?  4. PV of a perpetuity    What’s the present value of a perpetuity that pays $1500 per year if the appropriate interest rate is 15%? 5. PV of an uneven cash flow stream    At a rate of 5%, what is the present value of the following cash flow stream? $0 at Time 0; $250 at the end of           Year…

QUESTION SEVEN a) A bank offers to lend you K1,000 if you sign a note to pay K1,610.50 at the end of 5 years. What rate of interest is the bank charging you?                         b) Basket Wonders (BW) has a $1,000 Cash Deposit (CD) at the bank. The interest rate is 6% compounded quarterly for 1 year. What is the Effective Annual Interest Rate (EAR)?         c) Prepare an amortization schedule for a K1, 000 loan to be paid in 3 equal installments at the end of each of the next 3 years. Interest is charged at a rate of 6% per annum.

Question 5 An insurance firm agrees to pay you $5,089 at the end of 25 years if you pay premiums of $123 per year at the end of each year for 25 years. Find the internal rate of return to the nearest whole percentage point. Assuming you normally earn a return of 7 percent on your investments, is this a good deal or a bad deal? 3.95%; bad deal 4.05%; good deal 4.05%; bad deal ○ 4.15%; good deal O 4.15%; bad deal

Question 7 What is the simple interest rate on a $800 investment paying $263.04 interest in 13.7 years? % (round to the nearest tenth of a percent) Submit Question

Question 4 of 10    Moving to another question will save this response. Question 4 Your bank is offering a term deposit that will earn investors an EAR of 12.00%. Your manager asks you to quote this as an APR with monthly compounding. What is the correct APR?     11.66%     11.49%     12.00%     11.39%

Question 7 Suppose XYZ Bank Ltd has made 300 identical mortgage loans today. Each loan is for $350,000 to be repaid each month over the next 30 years. The interest rate on each loan is 7.5% per annum nominal. (a) Calculate the expected monthly cash flows to the bank from this mortgage pool and the principal amount owing to the bank at the end of five years. Assume no prepayments in your calculation. (b) Carefully describe the risks to the bank from making this pool of loans. (c) Suppose XYZ Bank Ltd has decided to issue a series of mortgage backed securities to pass on these risks. They issue 100 CMO contracts. Your manager is a bond fund manager and asks you, an analyst, to write down the advantages and disadvantages of investing in these CMO contracts. Writedown your response.

Question 8 Suppose a 65-year-old is contemplating retirement, expects to live for another 20 years, has a GHȼ1 million nest egg, expects the investments to earn a nominal annual rate of 6%, expects inflation to average 3% per year, and wants to withdraw a constant real amount annually over the next 20 years so as to maintain a constant standard of living. If the first withdrawal is to be made today, what is the amount of that initial withdrawal?

Question 16 16. You are going to use a mortgage to buy a house. This mortgage will have an initial balance of $200,000. You go online to a bank and they make you an offer: You can get a 3.30% loan for 30 years with 3 points. If you anticipate staying in the house for 10 years, what would be the effective (annual) interest rate of the loan? Please put your answer in percentage with two decimal places for instance put 7.63 for 7.63%. Please enter a positive value.

QUESTION 3 If you deposit today 11,445.85 in an account earning 8% compound interest, for how long should you invest the money in order to earn 12,488.36 (profit)?

Question content area top Part 1 ​(Comprehensive problem)  You would like to have ​$57,000 in 14 years. To accumulate this​ amount, you plan to deposit an equal sum in the bank each year that will earn 6 percent interest compounded annually. Your first payment will be made at the end of the year.   a.  How much must you deposit annually to accumulate this​ amount? b.  If you decide to make a large​ lump-sum deposit today instead of the annual​ deposits, how large should this​ lump-sum deposit​ be? ​ (Assume you can earn 6 percent on this​ deposit.) c.  At the end of five​ years, you will receive ​$15,000 and deposit this in the bank toward your goal of ​$57,000 at the end of year 14. In addition to the​ lump-sum deposit, how much must you deposit in equal annual​ amounts, beginning in year 1 to reach your​ goal? ​ (Again, assume you can earn 6 percent on your​ deposits.)       Question content area bottom Part 1 a.  How much must you deposit annually to accumulate this​ amount?…

QUESTION 1 Considering the following scenario. In years 0, 2, 4, 6, and 8, you deposit $750 in your savings account. The saving account earns 4.25% compounded anbually. What is the future value in year 10? 4,847.22 5,411.56 3,579.94 6,411.56

QUESTION 5 You own two investments, A and B, that have a combined total value of $17,400.00. Investment A is expected to make its next payment in 1 month. A's next payment is expected to be $93.00 and subsequent payments are expected to grow by 0.56 percent per month forever. The expected return for investment A is 0.90 percent per month. Investment B is expected to pay $142.00 each quarter forever and the next payment is expected in 3 months. What is the quarterly expected return for investment B? O-1.43% (plus or minus 2 bps) O 0.82% (plus or minus 2 bps) O 0.53% (plus or minus 2 bps) O 0.34% (plus or minus 2 bps) O none of the answers are within 2 bps of the correct answer

Question 15 What is the present value of your investment if you deposited $100.00 into your bank account at the beginning of each quarter for 10 years if the bank pays interest is 6% compounded semi-annually? a. $2,854.90 b. $3,036.46 c. $1,628.23 d. $3042.28 e. $900.17