Calculate the present value of the following annuity streams:

a. $5,000 received each year for 7 years on the last day of each year if your investments pay 7 percent compounded annually.
b. $5,000 received each quarter for 7 years on the last day of each quarter if your investments pay 7 percent compounded quarterly.
c. $5,000 received each year for 7 years on the first day of each year if your investments pay 7 percent compounded annually.
d. $5,000 received each quarter for 7 years on the first day of each quarter if your investments pay 7 percent compounded quarterly.
  
(For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

The Martinezes are planning to refinance their home (assuming that there are no additional finance charges). The outstanding balance on their original loan is $175,000. Their finance company has offered them two options:

Option A: A fixed-rate mortgage at an interest rate of 6.5% per year compounded monthly, payable over a 30-year period in 360 equal monthly installments.

Option B: A fixed-rate mortgage at an interest rate of 6.25% per year compounded monthly, payable over a 12-year period in 144 equal monthly installments.

(a) Find the monthly payment required to amortize each of these loans over the life of the loan. (Round your answers to the nearest cent.)
Option A: $  
Option B: $  

(b) How much interest would the Martinezes save if they chose the 12-year mortgage instead of the 30-year mortgage?
Use the rounded monthly payment values from part (a). (Round your answer to the nearest cent.)
$

Sarah secured a bank loan of $165,000 for the purchase of a house. The mortgage is to be amortized through monthly payments for a term of 15 years, with an interest rate of 3%/year compounded monthly on the unpaid balance. She plans to sell her house in 10 years. How much will Sarah still owe on her house at that time? (Round your answer to the nearest cent.)
$

The Turners have purchased a house for $140,000. They made an initial down payment of $40,000 and secured a mortgage with interest charged at the rate of 8%/year compounded monthly on the unpaid balance. The loan is to be amortized over 30 yr. (Round your answers to the nearest cent.)

(a) What monthly payment will the Turners be required to make?
$  

(b) How much total interest will they pay on the loan?
$  

(c) What will be their equity after 10 years?
$  

(d) What will be their equity after 22 years?
$  

Suppose an individual makes an initial investment of $1,800 in an account that earns 6.6%, compounded monthly, and makes additional contributions of $100 at the end of each month for a period of 12 years. After these 12 years, this individual wants to make withdrawals at the end of each month for the next 5 years (so that the account balance will be reduced to $0). (Round your answers to the nearest cent.)

(a) How much is in the account after the last deposit is made?
$  

(b) How much was deposited?
$   

(c) What is the amount of each withdrawal?
$  

(d) What is the total amount withdrawn?
$

1) You are an investor evaluating a project which is going to take 8 years. The project will pay $500,000 at the beginning of each year starting a year from now. These payments will grow at 2% for the first two years, then 3.5% for the following two years and then stay consistent at 4% until the end of the project. In the last year of the project you will receive a lump sum of $1 million while also paying a lump sum of $200,000. If your expected return on this project is 12.5%, what is the PV of the project?

2) You are 20 years old and anitcipate you will have your first child when you are 25 years old. At 25 years old, you want to save at the end of each month for the next 18 years. You anticipate that when your child goes to college, tuition room and board to be paid at the beginning of each year will cost $20,000. Education inflation is expected to be at 4% each year. If you can earn 8.5% on investments from when you are 25 years until your child completes college and you put $2,000 down at 25 years old as you start investing, how much money in real dollars do you have to save to achieve this goal accounting for education inflation?

Suppose an individual makes an initial investment of $1,800 in an account that earns 6.6%, compounded monthly, and makes additional contributions of $100 at the end of each month for a period of 12 years. After these 12 years, this individual wants to make withdrawals at the end of each month for the next 5 years (so that the account balance will be reduced to $0). (Round your answers to the nearest cent.)

Project A will cost $10 million dollars and generate after tax cash flow of $5 million dollars per year for the next three years. Shareholders need to earn 30%. The risk free rate is 3%. The firm's cost of funds is 18%. What is the NPV?

BOND VALUATION PROBLEMS

I.DETERMINE BOND VALUES BASED ON ANNUAL, SEMI-ANNUAL,QUARTERLY AND MONTHLY INTEREST PAYMENTS FOR THE FOLLOWING:

1.YTM=10%, 5.5 YEARS TO MATURITY, WITH COUPON RATE OF 14.5%

2.IRR=12.75%, 23 YEARS 3 MONTHS TO MATURITY, COUPON=8.94%

3.CURRENT MARKET RATE=4.5%, 35 MONTHS TO MATURITY, ANNUAL INTEREST INCOME OF $175

4.REQUIRED RATE=20.35%, 19.333 YEARS TO MATURITY, CURRENT YIELD EQUAL TO 20% WHEN PRICE=$900

5.YTM=15%, 9 YEARS TO MATURITY, CURRENT YIELD OF 20% WHEN PRICE=$750

BOND YIELD PROBLEMS

II.DETERMINE ALL POSSIBLE AND APPROPRIATE RATES OF RETURN BASED ON ANNUAL, SEMI-ANNUAL, QUARTERLY AND MONTHLY INTEREST PAYMENTS.

1.PRICE=$897.50, MATURITY=12 YEARS 180 DAYS, CURRENT YIELD=10% BASED ON CURRENT PRICE

2.PRICE=92.5% OF PAR, 5.5 YEARS TO MATURITY, COUPON OF 8%

3.PRICE=$979.50, CURRENT YIELD=11.23%

4.PRICE=$1275.75, COUPON YIELD=10.9%

5.PRICE=$2057, ANNUAL INTEREST OF $145.25, 7.5 YEARS TO maturity

A 3 year coupon bond, issued at $946.54, pays annual coupon and has a face value of $1000. Use the standard amortization table below to answer these questions:

Fill the missing number in E4

a. $941.13 b.$980.12 c. $981.13 d. 986.54 e. $1,005.41

A speculator purchased the bond for $946.54 at issuance, pocketed the first coupon at t=1 and then immediately sold the bond at its actual market price, which was different from $963.33. He managed to earn higher than YTM for his 1-year holding price. What must be the YTM for the buyer who took over the bond from the speculator, assume this buyer holds the bond for the remaining 2 years till maturity? Select the most accurate answer?

A. <7% b. <6% c. 5-6% d. 4% e. >3%

How are stock market indices constructed? Discuss the reasons why their coverage and construction vary.

  Home Place​ Hotels, Inc., is entering into a​ 3-year remodeling and expansion project. The construction will have a limiting effect on earnings during that​ time, but when it is​ complete, it should allow the company to enjoy much improved growth in earnings and dividends. Last​ year, the company paid a dividend of ​$4.20. It expects zero growth in the next year. In years 2 and​ 3, 5​% growth is​ expected, and in year​ 4, 16​% growth. In year 5 and​ thereafter, growth should be a constant 9​% per year. What is the maximum price per share that an investor who requires a return of 17​% should pay for Home Place Hotels common​ stock?

You sell short 200 shares at $50 per share. You post the 50% margin required for the short sale. Assume you earn no interest on your margin funds, nor pay any interest on the loan of shares. The company stock pays dividends of $0.33 per share every quarter. What is your rate of return on this position, if you close it out at $42 per share after one year? Enter answer in percents, accurate to 2 decimal places.