Question 1 (a) Brian borrows $500,000 now and the interest rate on the loan is $8% p.a. compounded monthly. Calculate the total amount of payment and the total amount of interest to be paid when the loàn is settled after two years using the following two payment methods. (i) A lump sum of principal and interest to be paid at the end of two years. ! (ii) Regular payments to be paid at the end of each month in the coming two years.

Question 1 (a) Brian borrows $500,000 now and the interest rate on the loan is $8% p.a. compounded monthly. Calculate the total amount of payment and the total amount of interest to be paid when the loàn is settled after two years using the following two payment methods. (i) A lump sum of principal and interest to be paid at the end of two years. ! (ii) Regular payments to be paid at the end of each month in the coming two years.

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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Similar questions

OLA#9.1: A 30-year, $450,000 mortgage at 3.30% compounded annually is repaid with monthly payments. a. What is the size of the monthly payments? b. Find the balance of the mortgage at the end of 7 years? c. By how much did the amortization period shorten by if the monthly payments are increased by $125 at the end of year seven?
Question 2 Assuming you only make the required monthly payments, how much will you still owe on 30 year mortgage at the end of 139 months. Assume an initial principal amount of 525,587 and an APR of 3% with monthly compounding.
A couple that borrows $300,000 at an APR of 4.8% compounded monthly on a 30- year mortgage has a monthly payment amount of $1574. (a) Fill in the missing entries for the first two payments of the amortization schedule. Balance Reduction Pmt # 0 1 2 Payment. $1574 $1574 Interest Unpaid Balance $300,000 (b) Approximately how much interest is paid during the first year? Hint: This can be done without making an amortization schedule. (c) After making their payments for ten years, they refinance the loan at an APR of 3.6% compounded monthly for 15 years, with a refinance charge of $2,000 included in the amount refinanced. Find the new monthly payment. (d) Find the amount saved by refinancing.
Please do c and d using factor method
K Consider the following loan. Complete parts (a)-(c) below. An individual borrowed $65,000 at an APR of 5%, which will be paid off with monthly payments of $442 for 19 years. ... a. Identify the amount borrowed, the annual interest rate, the number of payments per year, the loan term, and the payment amount. The amount borrowed is $ %, the number of payments per year is the loan term is years, and the payment amount is $ the annual interest rate is "
a) Complete the following table for the first 4 periods of an annuity that pays 8.2% compounded monthly. You are making $250 payments at the end of each period. Your initial deposit is $3000. Period Interest earned Payment Ending Balance ---- ---- 3000.00 1 2 3 4 b) How much will be in your account at the end of the 4th period? ____________ c) How much did you contribute? _________________ d) How much interest was earned? _______________
Question 2:: Mohamed is going to be paying AED 120,000 rent for his new apartment in JVC at the beginning of each year for the next 5 years to Paul Real Estate's bank account. The account pays an interest of 8%, compounded annually. a. Briefly explain what is an annuity due. b. Using the above information, calculate the future value of Mohamed's periodic payments. (- c. Given the same present value, the same compound interest rate and the same period, which type (ordinary annuity or annuity due) generates a higher future value amount? Why? (
Dengar

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