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# ADMS3530-Midterm-W10-So - Name Section ID Professor...

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TYPE A TYPE A Answer Keys TYPE B TYPE B Answer Keys Corresponding in A 1C 1B 6 2C 2D 7 3E 3C 8 4B 4E 9 5D 5E 1 0 6B 6C 1 7D 7C 2 8C 8E 3 9E 9B 4 10 E 10 D 5 11 D 11 B 16 12 C 12 D 17 13 D 13 D 18 14 D 14 C 19 15 D 15 D 20 16 B 16 D 11 17 D 17 C 12 18 D 18 D 13 19 C 19 D 14 20 D 20 D 15 21 B 21 C 26 22 E 22 C 27 23 E 23 E 28 24 A 24 E 29 25 A 25 E 30 26 C 26 B 21 27 C 27 E 22 28 E 28 E 23 29 E 29 A 24 30 E 30 A 25
2 Numerical questions (4 points each) 1. You want to buy a house that costs (before down payment) \$450,000. You make a 10% down payment and finance the rest with a 30-year mortgage. The mortgage has a five year renewal term for which the annual mortgage rate is 5.20% (APR compounded semi-annually). What will the remaining principal of the loan be at the end of the 5-year term if you are making monthly payments? A) \$272,400 B) \$310,450 C) \$372,662 D) \$372,947 E) \$414,068 Answer C The monthly interest rate is given by: (1 + i m ) 12 = 1 + EAR = (1 + 2.60%) 2 = 1.052676, that is i m = 0.4287% The monthly payment for the 30-year loan: 405,000 = PMT x PVIFA(0.4287%,360) Î PMT = \$2,210.01 Mortgage remaining at the end of 5 years, i.e. 300 months remaining: PV = \$2,210.01 x PVIFA(0.4287% , 300) = 372,661.65 2. In four years from today, the following cash flow stream will have a future value of \$5,104.64: \$100 today, \$500 at the end of one year, \$800 at the end of two years, “X” at the end of three years, and \$2,000 at the end of four years. The annual interest rate is 6%. What is X?

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ADMS3530-Midterm-W10-So - Name Section ID Professor...

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