Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Which of the following is true of a fully amortized loan? A. The amount of the payment applied to the principal remains the same during the loan period. B. Equal amounts of the payment are appiled to the principal Interest, taxes, and insurance. C. Additional payments applied to the interest during the loan period reduce the number of monthly payments required. D. Additional payments applied to the principal during the loan period reduce the number of monthly payments required
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- Please Help mearrow_forwardAn amortized loan: repays both the principal and the interest in one lump sum at the end of the loan term. requires the principal amount to be repaid in even increments over the life of the loan. requires that all payments be equal in amount and include both principal and interest. requires that all interest be repaid on a monthly basis while the principal is repaid at the end of the loan term. may have equal or increasing amounts applied to the principal from each loan payment.arrow_forwardBased upon the simple interest rate method of a fixed interest rate installment loan or mortgage, successive monthly loan payments over time a. pay the same percentage to interest and principal. b. pay increasing percentages to interest and decreasing percentages to principal. c. pay increasing percentages to principal and decreasing percentages to interest. d. pay decreasing percentages to interest and principal.arrow_forward
- asssuming that the interest is the only finance charge, how much interest would be paid on 5,000 installment loan to be repaid in 36 moonthly installment 166.10? what is the apr on this loan?arrow_forwardsolve this practice problemarrow_forwardCalculate the missing information for the installment loan that is being paid off early. Number ofPayments PaymentsMade PaymentsRemaining Sum-of-the-Digits PaymentsRemaining Sum-of-the-Digits Numberof Payments RebateFraction 18 7arrow_forward
- Distinguish between the present value of $1 and the present value of an annuity due of $1.arrow_forwardPlease do not give solution in image format ?arrow_forwardCalculate the missing information for the installment loan that is being paid off early. Number ofPayments PaymentsMade PaymentsRemaining Sum-of-the-Digits PaymentsRemaining Sum-of-the-Digits Numberof Payments RebateFraction 18 4arrow_forward
- A borrower has two alternatives for a loan: (1) issue a $360,000, 60-day, 5% note or (2) issue a $360,000, 60-day note that the creditor discounts at 5%. a. Compute the amount of the interest expense for each option. b. Determine the proceeds received by the borrower in each situation. c. Which alternative is more favorable to the borrower? Explain.arrow_forwardIndicate whether the statement is true or false. 1. Given 10 and 30 year loans with the same interest rate, the 30 year loan results in a lower periodic payment. a. True b. Falsearrow_forwardIdentify whether the following statements about the simple and compound interest methods are true or false. Statement Everything else held constant, an account that earns compound interest will grow more quickly than an otherwise identical account that earns simple interest. After the end of the second year and all other factors remaining equal, a future value based on compound interest will never exceed the future value based on simple interest. All other factors being equal, both the simple interest and the compound interest methods will accrue the same amount of earned interest by the end of the first year. True False O O O O O Oarrow_forward
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