You need to borrow money today from your father. You can make payments like this: 1st...

You need to borrow money today from your father. You can make payments like this: 1st year: $1000, 2nd year: $2,000, 3rd year: $3,000, 4th year: $4,000, 5th year: $5,000. Your dad says that hes getting 4% on his CDs, compounded annually, and you'll need to pay him the same rate. How much can you borrow?

Solutions

Expert Solution

Ans $ 13006.49

Year	Project Cash Flows (i)	DF@ 4%	DF@ 4% (ii)	PV of Project ( (i) * (ii) )

1	1000	1/((1+4%)^1)	0.962	961.54
2	2000	1/((1+4%)^2)	0.925	1,849.11
3	3000	1/((1+4%)^3)	0.889	2,666.99
4	4000	1/((1+4%)^4)	0.855	3,419.22
5	5000	1/((1+4%)^5)	0.822	4,109.64
		PV		13,006.49

jeff jeffy answered 1 month ago

Next > < Previous

Related Solutions

You would like to borrow $300,000.00 to finance a home. You wish to make monthly payments...

You would like to borrow $300,000.00 to finance a home. You wish to make monthly payments for 15 years. If the annual interest rate (APR) is quoted at 5.3%. What will the monthly payments be?

You would like to borrow $200,000.00 to finance a home. You wish to make monthly payments...

You would like to borrow $200,000.00 to finance a home. You wish to make monthly payments for 15 years. If the annual interest rate (APR) is quoted at 8.4%. What will the monthly payments be? Refinance the loan after you have made 84 payments. First what is remaining balance that is owed. Second If the new interest rate (APR) is 4% and n will be based on the remaining time period of the original loan what will be the new...

7. You borrow $35,000 today and will make equal annual payments for the next 3 years,...

7. You borrow $35,000 today and will make equal annual payments for the next 3 years, starting in 1 year. a. What is the value of the annual payment if the nominal interest on the loan is: 9.50% Payment b. Show the amortization of the loan in the table set up below: Year Beg. Balance Payment Interest Principal Ending Balance 1 2 3 TOTAL Excel function or formula answer please

If you need $5,000 in four years from today and you can make quarterly deposits of...

If you need $5,000 in four years from today and you can make quarterly deposits of $370 in your money market account, what is the APR you are looking for? If you need $5,000 in four years from today and you can make quarterly deposits of $370 in your money market account, what is the APR you are looking for? You will make the following investments for a boat: $2,500 today, $3,000 at the end of year three, and $1800...

You borrow $5,530 to purchase furniture for your house. You agree to make monthly payments for...

You borrow $5,530 to purchase furniture for your house. You agree to make monthly payments for 4 years to pay for the furniture. If the interest rate is 5 percent with monthly compounding, how much are your monthly payments? Assume the first payment is made one month after purchase. $103.95 $123.18 $127.35 $104.31 $121.90

You borrow $271,096 today to buy a house. You plan to make monthly payments over a 12-year period.

You borrow $271,096 today to buy a house. You plan to make monthly payments over a 12-year period. The bank has offered you a 4.06% interest rate, compounded monthly.What is your monthly payment amount?

Your sibling wants to borrow money from you that she can repay in four equal annual...

Your sibling wants to borrow money from you that she can repay in four equal annual payments of $1,000 at the end of each of the next four years. If you charge 3% interest rate on the loan to your sibling, and that is the competitive interest rate, what would be the amount that you can lend to her today? Group of answer choices $ 3,717.10 $ 3,828.61 $ 3,956.72 $ 4,310.13 $ 3,,549.95 $ 3,289.55

Your money is tied up and you need to borrow $10,000. The following two alternatives are...

Your money is tied up and you need to borrow $10,000. The following two alternatives are available at different banks: (1) Pay $3,311.61 at the end of each year for 5 years, starting at the end of the first year (5 payments total at 18 percent nominal per year compounded monthly which equates to 19.56 percent effective); or (2) pay $253.93 at the end of each month for 5 years, starting at the end of the first month (60 payments...

•Assume you borrow from the bank $5,000,000. Assume you make quarterly payments. Further assume that the...

•Assume you borrow from the bank $5,000,000. Assume you make quarterly payments. Further assume that the stated coupon rate is 9% per annum and the loan matures in 12 years. Determine the interest and principal payment for year 5. • Assume you borrow from the bank $5,000,000. Assume you make quarterly payments. Further assume that the stated coupon rate is 9% per annum and the loan matures in 12 years. You also make a balloon payment of $1,000,000 in the...

You borrow $50,000 from your parents. The terms of the loan are that you will make...

You borrow $50,000 from your parents. The terms of the loan are that you will make equal payments back to your parents at the end of each of the next 4 years. If the interest rate on the loan is 3% calculate 1) the amount of each payment 2) the amount that you will pay in interest for the four years (total amount of interest). Verify your results by constructing an amortization table. 3) Calculate the payment if instead of...

Subjects