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- 22. If $120,000 is borrowed to AIB at 15% interest to be paid back over 20 years, how much of the fifteen year's payment is interest (assume annual loan payments)? Hint: 1. Compute PMT 2. Compute the PV at the end of year 14 and the PV at the end of year 15. Compute the difference; you get third year's principal payment. 3. Interest = PMT - 15th year's principal payment. A. $10,883. B. $15,598. C. $16,789. Please provide an accurate answer.D4) What is the interest income in dollars on a $10 million art financing loan priced at 8% collateralized by $15 million at the beginning of the year if the value of the collateral falls to $12 million at the end of the year?What is the equivalent present value of the following series of payments: ₱ 5,000 the first year, ₱ 5,500 the second year, and ₱ 6,000 the third year? The interest rate is 8%, compounded annually. a. ₱ 15,904.22 b. ₱ 13,590.43 c. ₱ 12,573.90 d. ₱ 14,107.99
- What is the present value of $25,000 to be recieved in 15 years at a (a) 6.2 percent rate and (b) 9.6 percent rate? Explain why the present value is lower when the interest rate is higher?6) What is the future value (FV) of $20,000 in four years, assuming the interest rate is 4% per year? A) $15,208.16 B) $19,887.59 C) $23,397.17 D) $25,736.895) What is the present value (PV) of $50,000 received twenty years from now, assuming the interest rate is 6% per year?A) $32,500.00B) $13,251.70C) $15,590.24D) $27,282.92
- Q.1: Using amortization payments and suppose borrow $20000 at 8% compound annual interest to be repaid over 5 years and answer the following:The present amount needed to generate an annual income of $50,000 for 20 years if the expected rate of return is 7% is closest to: A. $2,049,800 B. $1,000,000 C. $650,000 D. $529,700 E. $258,420 b) A loan amount of $185,000 is to be paid off by equal monthly payments over a 30-year period with an annual interest rate of 4.5%, compounded monthly. The required monthly payment will be equal to: A. $1,207.64 B. $937.37 C. $693.75 D. $513.89 E. $8,325A borrower looking to borrow $100,000 can obtain an 80 percent loan with an 8 percent interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 90 percent loan at an 10 percent rate with the same loan term. What is the incremental ANNUAL cost of borrowing the additional funds? 20.13 17.42 23.98 18.19
- 8. Suppose that you want to take a five-year loan of $80,000. The interest rate is 9% per year, and the loan calls for equal annual payments. How much do you need to pay each year? A. $17,120.1 B. $19,169.4 C. $20,567.4 D. $21,333.1What is the present value of an annual annuity payment of Php7,000 made for 12 years with a required return of 5% with the first payment starting today? A. Php3,898 B. Php65,145 C. Php62,043 D. Php11,200 What is the present value of a semi-annual ordinary annuity payment of Php7,000 made for 12 years with a required annual return of 5%? A. Php 65,145 B. Php128,325 C. Php125,195 D. Php 62,0437. With a present value of $135,000, what is the size of the withdrawals that can be made at the end of each quarter for the next 10 years if money is worth 6.4% compounded quarterly? 12/2/2022 If $88,000 is invested in an annuity that earns 5.8% compounded quarterly, what payments will it provide at the end of each quarter for the next 5 years? C01120- Chapter 2: Mathematics of finance TCL