FIN 325 Week 2(1) - Due on Balance Payment of Loan Balance...

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Chapter 4 1) a) 100 46.32 2.16 b) 100 21.45 4.66 c) 100 67.56 1.48 d) 100 45.64 2.19 2) a) 100 *1.08^10 215.89 b) 100 *1.08^20 466.10 c) 100 *1.04^10 148.02 d) 100 *1.04^20 219.11 6) Present Value Years Future Value $400 11 $684 1/(1+ r)^11 = 684/400 1/(1 + r)^11 = 1.71 1/ 1 + r =1.71^11 1.05 5% $183 4 $249 1/(1+ r)^4 = 249/183 1/(1 + r)^4 = 1.3606557 1/ 1 + r =1.3606557^4 1.08 8.00% $300 7 $300 1/(1+ r)^7 = 300/300 1/(1 + r)^7 = 1 1/ 1 + r =1^7 1 0.00%
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22) 8,000.00 48 payments 10% APR 202.90 0.1 0.11 10.47 when r is 12 months 10.51 when r is 48 months 37) 100,000.00 30 year 6% Amortization Schedule Year Interest Principal Balance 1 $5,966.59 $1,228.01 $98,771.99 2 $5,890.85 $1,303.75 $97,468.24 3 $5,810.44 $1,384.17 $96,084.07 4 $5,725.07 $1,469.54 $94,614.53 5 $5,634.43 $1,560.18 $93,054.36 6 $5,538.20 $1,656.40 $91,397.95 7 $5,436.04 $1,758.57 $89,639.39 8 $5,327.57 $1,867.03 $87,772.35 9 $5,212.42 $1,982.19 $85,790.17 10 $5,090.16 $2,104.44 $83,685.72 11 $4,960.37 $2,234.24 $81,451.48 12 $4,822.56 $2,372.04 $79,079.44 38) a) 8% Beginning of Year-end Int. Year-End Amortization End of Year Year Balance
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Unformatted text preview: Due on Balance Payment of Loan Balance 1000 80 301.92 221.92 778.08 778.08 62.25 301.92 239.67 538.41 538.41 43.07 301.92 258.85 279.56 279.56 22.36 301.92 279.56 0.00 b) Loan Year-End Year-End Amortization Time Balance Interest on Bal. Payment of Loan 1000 80.00 301.92 221.92 1.00 778.08 62.25 301.92 239.67 2.00 538.41 43.07 301.92 258.85 3.00 279.56 22.36 301.92 279.56 4.00 0.00 0.00 0.00 0.00 c) 301.92 * 2.5771 778.08 778.08 * http://www.netmba.com/finance/time-value/annuity/ Chapter 5 3) 1.14 0.07 1,142.86 7.00 1,142.86 4) 80 annually sells for $950 0.08 8.42 8.42% is current yield 80.00 86.40 93.31 9.5 259.71 0.27 9.1 9.1 is the yield to maturity 1000*.08 80 8% is the current rate 18) a) If the yield to maturity has increased to 15% then the price of the bond b) getting 80% of the face value instead of the 100% has fallen . They expect to receive a smaller yield to maturity because they are only...
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This note was uploaded on 09/06/2011 for the course FIN n/a taught by Professor N/a during the Spring '06 term at University of Phoenix.

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FIN 325 Week 2(1) - Due on Balance Payment of Loan Balance...

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