Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:A man purchases a bond for $900. The bond has a face value of $1,000
and pays semi-annual interest payments of $50 each. If the bond is paid in full after
10 years, what annual rate of return will the man receive?
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- you purchases a $1000 face value bond for $950. you held the bond for 10 years until it doubles in face value. what rate of return did you earn over the 10 years. Assume yearly compoundingarrow_forwardYou have just purchased a home and taken out a $460,000 mortgage. The mortgage has a 30-year term with monthly payments and an APR of 4.72%. a. How much will you pay in interest, and how much will you pay in principal, during the first year? b. How much will you pay in interest, and how much will you pay in principal, during the 20th year (i.e., between 19 and 20 years from now)?arrow_forwardYou plan to purchase an $80,000 house using a 15-year mortgage obtained from your local bank. The mortgage rate offered to you is 8.00 percent. You will make a down payment of 20 percent of the purchase price. a. Calculate your monthly payments on this mortgage.b. Calculate the amount of interest and, separately, principal paid in the 127th payment.c. Calculate the amount of interest and, separately, principal paid in the 159th payment.d. Calculate the amount of interest paid over the life of this mortgage.arrow_forward
- Yogesharrow_forwardYou have decided to buy a perpetual bond. The bond makes one payment at the end of every year forever and has an interest rate of 7%. If the bond initially costs $5000, what is the payment every year?arrow_forwardThe problem describes a debt to be amortized. (Round your answers to the nearest cent.)A man buys a house for $330,000. He makes a $150,000 down payment and amortizes the rest of the purchase price with semiannual payments over the next 10 years. The interest rate on the debt is 12%, compounded semiannually. (a) Find the size of each payment.$ (b) Find the total amount paid for the purchase.$ (c) Find the total interest paid over the life of the loan.arrow_forward
- A borrower has a 30-years mortgage loan for $400,000 with an interest rate of 6% and payments. If she wants to pay the loan after 8 years, what would the outstanding balance of the loan?arrow_forwardAlan's monthly payments of $600 will pay off his mortgage loan in 7 years and 5 months. The interest rate on his mortgage is 6.6% compounded monthly. What is the current balance of the loan?arrow_forwardMailee will pay out $6,000 at the end of year two and $8,000 at the end of year three. Then Mailee will receive $10,000 at the end of year four. With an interest rate of 10%, what is the net value of the payments versus receipts in today's dollars?arrow_forward
- You purchase a condominium for $125,000. The bank requires a 20% down payment. You borrow the remainder as a 30-year, 6.6% mortgage with monthly payments. What portion of the payments during. the first 33 months goes toward principal?arrow_forwardYou have just purchased a home and taken out a $420,000 mortgage. The mortgage has a 30-year term with monthly payments and an APR of 5,68%. a. How much will you pay in interest, and how much will you pay in principal, during the first year? b. How much will you pay in interest, and how much will you pay in principal, during the 20th year (i.e., between 19 and 20 years from now)?arrow_forwardAn individual wishes to purchase a house that is selling for $200,000. The person has $50,000 they can use as a down-payment towards the purchase of the house. The bank is offering a 5-year Term with an interest rate of 10% compounded monthly. The mortgage amount will be amortized over a period of 10-years. What are the individual's monthly payments? How much of the original amount of the mortgage is still outstanding at the end of the 5-year Term of the mortgage disçussed in Part 1 of this problem?arrow_forward
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