Quiz02revised

# Quiz02revised - 3 You take out a 4 year loan for \$1,000 The...

This preview shows page 1. Sign up to view the full content.

UGBA103-F08 Monday, 22Sep-2008 Quiz II: Annuities and Loans UGBA 103 1. You are given a loan quote of 6% APR (semi-annually compounded). Convert this into an APR with quarterly compounding. Please write the APR with quarterly compounding in the box: 2. The quoted interest rate on a loan is 3% (quoted as an APR, compounded semiannually). Loan payments are made semiannually over 40 periods (i.e. 20 years). The first payment of \$100 occurs after half a year. The required payments are shrinking by 20% every half a year (Thus, the required payment after one year is \$80). What is the loan amount that has been taken out at time 0?
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 3. You take out a 4 year loan for \$1,000. The interest rate is 4% (quoted as an APR, compounded semiannually), and the loan requires you to make equal payments every 6 months for 4 years (i.e. the first payment will be 6 months from today, and there will be eight payments in all). How much of the principal is paid off in year 3 (i.e. with the 5 th and 6 th payment). Please write your answer in the box. Answer to #2: ____________________ Name: ________________ SID # : ________________ Section Number _________ Answer to #1: ____________________ Answer to #3: ____________________...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online