# Assignment1 - Team Assignment 1 due Thursday February 4 1 On September 1 2004 Susan Chao bought a car for \$ 25,000 She paid \$ 3,000 down and

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Team Assignment – 1 ( due: Thursday, February 4 ) 1. On September 1 , 2004 , Susan Chao bought a car for \$ 25 , 000 . She paid \$ 3 , 000 down and financed the balance with a six-year loan at a stated annual interest rate of 10 . 8 percent , compounded monthly . She started the monthly payments exactly one month after the purchase ( i . e . October 1 , 2004 ) . Three years later , at the end of October 2007 , Susan got a new job and decided to pay off the loan . If the bank charges her a 2 percent prepayment penalty based on the loan balance , how much must she pay the bank on November 1 , 2007 ? ( RWJ 56 ) 2. A 6-year annuity of twelve \$ 8 , 000 semiannual payments will begin 7 years from now , with the first payment coming 7 years from now . If the discount rate is 16 percent compounded quarterly , what is the value of this annuity four years from now ? What is the value ten years from now ? What is the current value of the annuity

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## This note was uploaded on 06/18/2011 for the course FIN 500 taught by Professor Kannan,s during the Fall '11 term at University of Illinois, Urbana Champaign.

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Assignment1 - Team Assignment 1 due Thursday February 4 1 On September 1 2004 Susan Chao bought a car for \$ 25,000 She paid \$ 3,000 down and

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