Ms. Callan, a citizen of the United States who resides in the country, wants to invest in a UK government bond that matures in 10 years.  The government bond in which she will invest pays interest once a year in British pounds, and the principal repayment is also in British pounds.  The government bond she is considering pays 4% and she belies that interest rate over the next 20 years in the United Kingdom will not fall below 4%.  In the opinion of Ms. Callan, she will be able earn at a minimum a 4% return on her investment.  What is your opinion regarding the risks of realizing at least a 4% return?

Yuri is willing to invest $35,000 for six years, and is an economically rational investor. He has identified three investment alternatives (X, Y, and Z) that vary in their method of calculating interest and in the annual interest rate offered. Since he can only make one investment during the six-year investment period, complete the following table and indicate whether Yuri should invest in each of the investments. Note: When calculating each investment’s future value, assume that all interest is earned annually. The final value should be rounded to the nearest whole dollar. Investment Interest Rate and Method Expected Future Value Make this investment? X 9% compound interest        Y 12% compound interest        Z 12% simple interest

Ten years ago Jim took a mortgage loan of $200,000 to be repaid in 20 equal annual installments of $30,197.34.  The bank has told him that they would accept $145,000 today as payment in full for the remainder of the loan.  What is the balance on this loan? If we assume that Jim has the money, what interest rate must he earn on alternative investments in order not to accept the bank offer?

After graduating from Baruch, Amal plans on investing $8,000 every year beginning age 25 to           age 65 (40 years).  She plans on buying a Total US Stock Market Index fund and expects it will earn a “gross” 10% a year – in line with the historic return from US stocks. How much would her portfolio be worth at age 65 if her expense ratios was 0.05% Ans:

Ms. Jones wants to make 8​% nominal interest compounded quarterly on a bond investment. She has an opportunity to purchase a 6​%, $10,000 bond that will mature in 16 years and pays quarterly interest. This means that she will receive quarterly interest payments on the face value of the bond ($10,000​) at 6​% nominal interest. After 16 years she will receive the face value of the bond. How much should she be willing to pay for the bond​ today?

n this economy, there are 10,000 borrowers. Each person borrows $100 for a 1 year loan. For the lender not to make a loss, the lender must set an interest rate such that they earn at least as much as their outside option of not lending to people from all borrowers that did not default in this economy. In this case, the outside option is the risk-free interest rate on a 1-year US Treasury securtiy. The 1-year USTS pays annual interest rate of i = 0.03. What is the minimum interest rate that the lender will charge to borrow money in this economy

Hi there, I'm trying to solve this corporate finance problem without using excel. John has a 5 year mortgage contract on $332,100 amortized over 25 years at a rate of 5% per year compounded semiannually. At the end of the 5 year contract, the outstanding principal is $250,000. John's interest rate is still the same but he wishes to switch to weekly payments. How much will John's weekly payments be?

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