A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $3,100 per month for the next hree years and then $2,100 per month for two years after that. If the bank is charging customers 10.00 percent APR, how much would be willing to lend the business owner? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value

A small business owner visits his bank to ask for a loan. The owner states that he can repay a loan at $3,100 per month for the next hree years and then $2,100 per month for two years after that. If the bank is charging customers 10.00 percent APR, how much would be willing to lend the business owner? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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PLEASE ANSWER THIS USING YOUR OWN ANSWERS. DO NOT COPY ON INTERNET. IF YOU SEE THIS QUESTION AGAIN, DO NOT ANSWER. IF YOU ANSWER THIS IN TYPEWRITTEN, COMPLETE, CORRECT, AND IN ORIGINAL WAY, I WILL UPVOTE. THANK YOU!
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A local bank advertises the following deal: "Pay us $100 at the end of each year for 10 years and then we will pay you (or your beneficiaries) $100 at the end of each year forever." a. Calculate the present value of your payments to the bank if the interest rate is 6%. Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Present value b. What is the present value of a $100 perpetuity deferred for 10 years if the interest rate is 6%? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Present value c. Is this a good deal? Yes No
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