Zoey signs a note to repay $10,000.00 plus 8% interest in 1 year. Four months before the note is due, the debt is commuted into 3 equal payments. The first payment is due immediately and the 2nd and 3rd payment are due 4 and 12 months from the date of commutation. The interest rate is set at 9% and the focal date 4 months from the date of commutation. Calculate the amount of the new payments.

Zoey signs a note to repay $10,000.00 plus 8% interest in 1 year. Four months before the note is due, the debt is commuted into 3 equal payments. The first payment is due immediately and the 2nd and 3rd payment are due 4 and 12 months from the date of commutation. The interest rate is set at 9% and the focal date 4 months from the date of commutation. Calculate the amount of the new payments.

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

See similar textbooks

Similar questions

Joe is settling his debt by paying P50,000 at the beginning of every 6 months for 3 years. If the loan bears an interest of 9% compounded monthly, how much is the loan? *
s
Lea borrows PhP 100,000 at an annual effective interest rate of 4% and agrees to repay it with 30 level annual instalments paid at the end of each year. At the end of 10 years, Lea has the option to repay the entire loan with a final payment X, in addition to the regular payment. This will yield the lender an annual effective interest rate of 4.5% over the 10 year period. Calculate X.
Sally deposits $13, 036 in an account that earns 12% interest per annum. Calculate the interest payment on a 9 year simple interest deposit.
Dante has a mortgage of $700,000 through the Meridian Bank for a vacation property. The mortgage is repaid by end of month payments with an interest rate of 4.6% compounded monthly for a term of 2 years, amortized over 20 years. At the end of the 2-year term, Dante will renew the mortgage for another 2-year term at a new, lower interest rate of 3.5% compounded monthly. Round ALL answers to two decimal places if necessary. 1) What are the end of month payments before the renewal of the mortgage? C/Y = P/Y = I/Y = P1 = % 2) What is the balance when the mortgage is renewed? P/Y = I/Y = PV = $ PMT = $ (enter the rounded value into the calculator) % P2= 3) What will be the new end of month payments after the mortgage is renewed? C/Y = PV = $ N = PMT= $ FV = $ BAL = $ Enter a positive value. N = FV = $
Alan borrows $100,000 at nominal interest rate 9% per annum which matures in 5years. Repayments are made monthly such that each monthly payment in the last 2years is twice that in the first 3 years.c) After 3 years, the market nominal interest rate falls to 6% per annum. Alan wants to terminate the loan. The bank charges the termination fee which is 40% of the difference in total remaining interest payment. Calculate the amount Alan needs to pay the bank (including outstanding balance and termination fee).d) Alan borrows the amount in part c) at 6% per annum. If he keeps to the current monthly payment, how long will he pay off everything ?e) What is Alan’s monthly payment if he decides to keep to his schedule of paying off the debt in the next 2 years ?f) Suppose Alan follows the payment schedule in part e). Write down the equation of value for the cash flow generated by Alan in terms of the hypothetically constant monthly internal rate of return i. Use Excel’s Solver to find i.
Prisha received a loan of $8,100 at 5.25% compounded monthly. He settled the loan by making periodic payments at the end of every three months for 6 years, with the first payment made 3 years and 3 months from now. What was the size of the periodic payments? $ 0.00 Round to the nearest cent

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS