FINTEST2-6 - C1 Exam Number 3(12 Points Given the problem...

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

View Full Document Right Arrow Icon
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: C1. Exam Number 3. (12 Points) Given the problem on the left, write the required formula on the right. If factors are required, use as few as possible. Use numerical interest rates when appropriate. . You borrow $90,000 with a 30-year mortgage at 6% nominal interest rate. A = 90000*(A/P' .005, 360) Payments are monthly. Write the formula for the amount of the monthly payment. . You borrow $90.00!) with a 30-year The amount owed is the present mortgage at 5% nominal intemst rate worth of the remaining payments. Aftermaking payments for 30 months, you Owed = A*(P/A, .005, 330). sell the house for $95.0“). Write the Remaining = 95000 - Owed formula for the amount of money remaining of the selling price after you pay off your loan to the bank. . 10' years ago you boughta corporatebond Set the net present worth to zero. for $9,000. The bond has a face value of -9000 + 800( P/A, i r 10) + $10.000- Every yearthecompeny has paid +10000(P/F,i,10) = 0 interest to you in the amount of 8% of the face value. The bond has just matured and paid you the full face value. Write the formula that you must solve to determine the IRR for the investment in the bond. . A good friend is in need of money. He The future value of the amount in will receive $20,000 from a trust fund in real terms is 20000/(1 ,04)2 two years. Although that money amount is Pay = [zoom/(1,0011%, .05, 2) fixed, the general inflation rate is 4%. He will sign over the money from the trust fund to you if you will give him some money today. Write the formula for the most that you can give him if your real MARR is 6% per year. ...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern