Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A person borrowed an amount of one million dinars from a bank with compound interest , the annual rate of which is 10%, and it was agreed between the debtor and the creditor to pay the loan and the interest together in 3 equal installments, so that the installment would be paid at the end of each year. What is required is: a. Find the amount of the equal installment. B . Illustrate the appropriate depreciation schedule.
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- An appraiser is looking for comparable sales and finds a property that recently sold for $224, 000. She finds that the buyer was able to assume the seller's fully amortizing mortgage, which had monthly payments based on a 7 percent interest. The balance of the loan at the time of sale was $148, 000 with a remaining term of 15 years (monthly payments). The appraiser determines that if a $148, 000 loan was obtained on the same property, monthly payments at the market rate for a 15-year fully amortizing loan would have been 8 percent with no points. Required: a. Assume that the buyer is expected to benefit from the interest savings on the assumable loan for the entire loan term. What is the cash equivalent value of the property? b. What is the cash equivalent value of the property if you assumed that the buyer is only expected to benefit from interest savings for five years because he would probably sell or refinance after five years? Use excel spreadsheet to show work and provideanswer.arrow_forwardAnna borrows 188000 from a bank for a term of 21 years. The loan is to be repaid by level annual repayments, paid in arrears, and the interest rate is 5% per annum effective. Calculate the capital outstanding immediately after the 6th payment. Give your answer to two decimal places.arrow_forwarda) A bank made a 4-year 12% amortizing $2,500,000 loan with equal payments. What is the amount of interest and principal paid at the end of the 3rd year? What is the balance on the loan at the end of the 3rd year? b) Assume instead the bank demands that the borrower pay interest only for the first two years and then principal payments of $1,250,000 in years 3 and 4. What is the amount of interest and principal paid at the end of the 3rd year? What is the balance on the loan at the end of the 3rd year? Assume the same 12% rate of interest. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).arrow_forward
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