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"?
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%...
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?
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 ?
Your dad would like to finance you to complete college. He
agrees to lend you $12,000 on your 21st birthday when you join
college and agrees to increase the amount lent each year by $2,000
for the next 3 years. If you have to pay him back $18,000 per year
on your 28th birthday to your 32nd birthday, what internal rate of
return per year compounded yearly did you end up paying for the
amount borrowed from your dad?
3.5%...
Today you lent money to a friend. They will pay you back with
two payments. One year from now they will pay you $100. Three years
from today they will pay you $500. You charged them a periodic
annual interest rate of 4%. Today you lent them
$________________ ( Round to the nearest
penny.)
You want to buy a car, and a local bank will lend you $40,000.
The loan will be fully amortized over 5 years (60 months), and the
nominal interest rate will be 10% with interest paid monthly.
What will be the monthly loan payment? Do not round intermediate
steps. Round your answer to the nearest cent.
$
What will be the loan's EAR? Do not round intermediate steps.
Round your answer to two decimal places.
%
Suppose you and your friend want to start a business, and the
friend suggests to start a movie dvd rental store in the bronx. Is
that an attractive market? Discuss using Porter's Five Forces
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 life savings into her business than you would if she had not
done so? Why? Discuss in details.
8.
You desperately need some money and only your ‘miserly' friend
has any. He agrees to loan you the money you need, if you make
payments of $20 a month for the next six months. In keeping with
his reputation, he requires that the first payment be paid today.
He also charges you 1.5 percent interest per month. How much money
are you borrowing?
$126.46
$114.96
$113.94
$115.65
$116.56