Question
In: Finance
You lend $400,000 to your friend for seven years. According to the agreement, your friend has...
You lend $400,000 to your friend for seven years. According to the agreement, your friend has to repay $89,000 annually for the first four years with a fixed interest rate of 15% compounded annually. Your friend tries to bargain for a 13% charged for the remaining periods. What should be the annual repayment for the last three years?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Suppose that you lend your friend $40,000 today and you friend agrees to pay you $14,295...
Suppose that you lend your friend $40,000 today and you friend
agrees to pay you $14,295 at the end of each the next 4 years .
What annual rate of return (r) will you earn if you make this
"investment"?
you lend a friend 25,000, which your friend will repay in 14 equal annual end of...
you
lend a friend 25,000, which your friend will repay in 14 equal
annual end of year payments of $4,000 w/ the first payment to be
recieved 1 yr from now. ehat rate does your loan recieve ?
1. You lend $900 to a friend who promises to pay you $250 at the end...
1. You lend $900 to a friend who promises to pay you $250 at the
end of each of the next 4 years.
a. Draw a timeline from your perspective.
b. If you can reliably earn 4% per year, what is the net present
value (NPV) of the loan?
2. You own a perpetual preferred stock issued by Goldman Sachs.
If the GS preferred pays a dividend of $.80 per year and today’s
market rate for this preferred is 3.0%...
1. Answer the following finance questions, a. If you lend $1,000 to a friend for 3...
1. Answer the following finance questions,
a. If you lend $1,000 to a friend for 3 years at an interest
rate of 3%, how much will she owe you as balloon payment at the
end? This is a balloon loan with all payment at the end of the
loan's term. Round to the nearest cent.
b. If you borrow $8,000 for 6 years at an interest rate of 6%,
what are the annual payments you'd have to make to pay...
Would you be more willing to lend to a friend if she put all of her...
Would you be more willing to lend to a friend if she put all of
her life savings into her business than you would if she had not
done so? Why? Discuss in details.
You enter into a five-to-eight-month forward rate agreement with a firm. You agree to lend the...
You enter into a five-to-eight-month forward rate agreement with
a firm. You agree to lend the firm a 3-month loan of $5 million
starting 5 months from now, with a quarterly compounded forward
interest rate of 2.5% per annum. Currently, the continuously
compounded 5-month and 8-month interest rates are 3% per annum and
3.5% per annum, respectively.
1) What is the implied forward rate for the 3-month period
starting 5 months from now?
2) What is the present value of...
You enter into a five-to-eight-month forward rate agreement witha firm. You agree to lend the...
You enter into a five-to-eight-month forward rate agreement with
a firm. You agree to lend the firm a 3-month loan of $5 million
starting 5 months from now, with a quarterly compounded forward
interest rate of 2.5% per annum. Currently, the continuously
compounded 5-month and 8-month interest rates are 3% per annum and
3.5% per annum, respectively.1) What is the implied forward rate for the 3-month period
starting 5 months from now?2) What is the present value of this forward...
Calculate using Excel:Your friend claims that he invested $5,000 seven years ago andthat this...
Calculate using Excel:
Your friend claims that he invested $5,000 seven years ago and
that this investment is worth $ 38,700 today. For this to be true,
what annual rate of return did he have to earn? Assume the interest
compounds annually.
You purchased a house five years ago and borrowed $400,000 . The loan you used has...
You purchased a house five years ago and borrowed $400,000
.
The loan you used has 300 more monthly payments of $1,686 each,
starting next month, to pay off the loan.
You can take out a new loan for $355,625 at 2.00% APR compounded
monthly , with 300 more payments, starting next month to pay off
this new loan.
If your investments earn 2.75% APR compounded monthly , how much
will you save in present value terms by using the...
You purchased a house five years ago and borrowed $400,000 . The loan you used has...
You purchased a house five years ago and borrowed $400,000 . The
loan you used has 300 more monthly payments of $1,686 each,
starting next month, to pay off the loan. You can take out a new
loan for $355,625 at 2.00% APR compounded monthly , with 300 more
payments, starting next month to pay off this new loan. If your
investments earn 2.75% APR compounded monthly , how much will you
save in present value terms by using the...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella Co.,...
- Parallel Arrays This question is in MindTap Cengage Summary In this lab, you use what you...
- 5. You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella...
- JAVA Write a test program that prompts the user to enter a series of integers and...
- (2) Cite an example on how organizations like Google, Facebook, Youtube etc collect data for image...
- The legal landscape is perpetually changing. Psychologists must remain abreast of these changes to avoid potentially...
- We are evaluating a project that costs $1.68 million, has a six-year life, and has no...
ADVERTISEMENT