12 Today, you are purchasing a $2,269 12-year car loan at 7 % You will pay annua
ID: 2684550 • Letter: 1
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12 Today, you are purchasing a $2,269 12-year car loan at 7 % You will pay annually at the end of each year What is the amount of each payment 13 If you receive $287 at the end of each year for the first three yrs and $982 at the end of each year for the next three yrs What is the PV Assume interest rate is 8% 14 In order to buy a house, you take a loan of 100,000 at 75% for a period of 13 yrs Compute the balance remaining at the end of 5 yrs 15 How many yrs it will take to grow your money from $4,140 to $9,250 if you can earn an interest of 7% compounded quarterly 17 Say, you deposit $3,613 in a bank for 16 yrs What is the amount you will have in the bank at the end of 16 yrs if interest of 4 % for first 9 yrs and interest of 7 % for the remaining yrs 18 How many yrs it will take you to double your money if you can earn 19% each year, given that compounding is quarterly 19 B is considering a drug project that costs $180,372 today and is expected to generate end-of-year annual cash flows of $11,811, forever At what discount rate would B be indifferent between accepting and rejecting the projectExplanation / Answer
12 Today, you are purchasing a $2,269 12-year car loan at 7 % You will pay annually at the end of each year What is the amount of each payment
$285.67
13 If you receive $287 at the end of each year for the first three yrs and $982 at the end of each year for the next three yrs What is the PV Assume interest rate is 8%
$2,748.59
14 In order to buy a house, you take a loan of 100,000 at 75% for a period of 13 yrs Compute the balance remaining at the end of 5 yrs
$72,082.44
15 How many yrs it will take to grow your money from $4,140 to $9,250 if you can earn an interest of 7% compounded quarterly
11.58 years
17 Say, you deposit $3,613 in a bank for 16 yrs What is the amount you will have in the bank at the end of 16 yrs if interest of 4 % for first 9 yrs and interest of 7 % for the remaining yrs
$8,257.61
18 How many yrs it will take you to double your money if you can earn 19% each year, given that compounding is quarterly
3.73 years
19 B is considering a drug project that costs $180,372 today and is expected to generate end-of-year annual cash flows of $11,811, forever At what discount rate would B be indifferent between accepting and rejecting the project
6.55%
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