You have just borrowed $250,000 to buy a condo. You will repay the loan in equal monthly payments of $2,011.56 over the next 30 years. a. What monthly interest rate are you paying on the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is the APR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. What is the effective annual rate on that loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

You have just borrowed $250,000 to buy a condo. You will repay the loan in equal monthly payments of $2,011.56 over the next 30 years. a. What monthly interest rate are you paying on the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b. What is the APR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) c. What is the effective annual rate on that loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

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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Suppose you purchase a home and obtain a 15-year fixed-rate loan of $195,000 at an annual interest rate of 6.0%. a) What is your monthly payment? N: months I %: P.V: $ PMT: $ F.V: 0 P/Y: 12 C/Y: 12 b) Of the first month's mortgage payment, how much is interest? HINT: I=Prt Interest: I=$ c) Of the first month's mortgage payment, how much is applied to the principal? HINT: PMT - Interest Amount Applied to Principal: $ d) How much is your outstanding balance after the first month’s payment? HINT: Principal - Amount Applied to Principal Outstanding Balance after first payment: $
Assume you bought a car using a loan that requires payments of $3,000 to be made at the end of every yearfor the next three years. The loan agreement indicatesthe annual interest rate is 6 percent. Which table in thisappendix would you use to calculate the car’s equivalentcost if you were to pay for it in full today?a. Table C.1 (Future Value of $1)b. Table C.2 (Present Value of $1)c. Table C.3 (Future Value of Annuity of $1)d. Table C.4 (Present Value of Annuity of $1)
The formula below finds the monthly payment for a loan (car, mortgage, student): P=I (r/1-(1+r)-n ) P = monthly payment I = initial loan amount borrowed r = monthly interest rate n = number of months to pay off the loan 5. Assume you decide to take a 5-year car loan, with a 3.25% APR paid monthly. Insert the numbers you have so far into the formula above and simplify as much as possible. Show any in-between steps you do. (Note: simplify means to calculate the parts of the equation that you can so far.) 6. Use your simplified formula from above to answer: What is the largest amount you can borrow for the car if you can afford a $350/month payment? Show work.
You want to buy a car, and a local bank will lend you $15,000. The loan would be fully amortized over 6 years (72 months), and the nominal interest rate would be 6%, with interest paid monthly. What is the monthly loan payment? Do not round intermediate calculations. Round your answer to the nearest cent. $ What is the loan's EFF%? Do not round intermediate calculations. Round your answer to two decimal places. %
1. You want to buy a car, and a local bank will lend you $15,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 8% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR? Do not round intermediate calculations. Round your answer for the monthly loan payment to the nearest cent and for EAR to two decimal places 2. What is the present value of a $400 perpetuity if the interest rate is 8%? If interest rates doubled to 16%, what would its present value be? Round your answers to the nearest cent. 3. You borrow $90,000; the annual loan payments are $12,852.25 for 30 years. What interest rate are you being charged? Round your answer to the nearest whole number.
Find the interest rates earned on each of the following. Round your answers to the nearest whole number. a. You borrow $660 and promise to pay back $759 at the end of 1 year. % b. You lend $660 and the borrower promises to pay you $759 at the end of 1 year. % c. You borrow $69,000 and promise to pay back $109,495 at the end of 6 years. % d. You borrow $11,000 and promise to make payments of $3,359.50 at the end of each year for 5 years. %
Friendly's Quick Loans, Incorporated, offers you "$4.20 for $5.20 or I knock on your door." This means you get $4.20 today and repay $5.20 when you get your paycheck in one week (or else). a. If you were brave enough to ask, what APR would Friendly's say you were paying? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What's the effective annual return Friendly's earns on this lending business? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. 1,056.46 % 23.81 % a. APR b. EAR 4
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Suppose that you decide to borrow $13,000 for a new car. You can select one of the following loans, each requiring regular monthly payments. Installment Loan A: three-year loan at 6.3% Installment Loan B: five-year loan at 4.8% P. Use PMT = to complete parts (a) through (c) below. - nt 1- a. Find the monthly payments and the total interest for Loan A. The monthly payment for Loan A is $. (Do not round until the final answer. Then round to the nearest cent as needed.) The total interest for Loan A is $. (Round to the nearest cent as needed.) b. Find the monthly payments and the total interest for Loan B. The monthly payment for Loan B is $. (Do not round until the final answer. Then round to the nearest cent as needed.) The total interest for Loan B is $. (Round to the nearest cent as needed.) MacBook Air
You borrowed $18,000 from a friend and promised to pay the loan in 12 equal annual installments beginning one year from the date of the loan. Your friend would like to be reimbursed for the time value of money at a 9% annual rate. What is the annual payment you must make to pay back your friend? Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. Show less Table, Excel, or calculator function not attempted Present Value: not attempted n = not attempted i = not attempted Annual Installment:
If you borrow $8,637 and are required to pay back the loan in five equal annual installments of $2,700, what is the interest rate associated with the loan? Use Appendix D or a financial calculator to solve this problem. (Round your answer to the nearest whole percent.) Interest rate %

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