My wife wants to buy a new Volvo XC90 to haul around our two
kids and...
My wife wants to buy a new Volvo XC90 to haul around our two
kids and two cats. A 2020 model costs $65,000 (including taxes and
tag). A used 2017 Volvo XC90 costs $45,000. Assume an interest rate
of 2.6% and that the entire amount is financed.
What will be our monthly payment on the new model if we take
out a 4 year loan? (8 points)
What will be the monthly payment on the used model if we take
out a 4 year loan? (8 points)
If we save the difference between (a) and (b) each month for
four years and earn a stated annual rate of 8%, how much money will
we have at the end of 4 years? (4 points)
Crow Valley offers an 8 percent coupon bond with semiannual
payments and a yield to maturity of 10 percent. The bond
matures in 20 years, and the face value is $1,000.
What is the market price per bond if the face value is $1,000?
(10 points)
Is this a discount or premium bond? (5 points)
You would like to give your son $500,000 towards his college
education 16 years from now. How much money must you set aside
today for this purpose if you can earn 8 percent on your
investments? (10 points)
On your fifteenth birthday, you received $5,000 which you
invested at 8 percent interest, compounded
annually. Your investment is now worth
$10,500. How old are you today (round to the nearest
year)? (10 points)
Ashley expects to receive cash flows of $200, $600, $600, and
($200) at the end of each periodover the next 4 years,
respectively. Assuming a 6 percent discount rate, what
is the present value of these cash flows? (10 points)
Solutions
Expert Solution
The answer contain the formulas of EMI, futre vlue of money,
bond valuation, compund interest and present value of cash flow
respectively.
My wife wants to buy a new Volvo XC90 to haul around our two
kids and two cats. A 2020 model costs $65,000 (including taxes and
tag). A used 2017 Volvo XC90 costs $45,000. Assume an interest rate
of 2.6% and that the entire amount is financed.
What will be our monthly payment on the new model if we take
out a 4 year loan? (8 points)
What will be the monthly payment on the used model if we take...
Mr Robert Lee wants to buy a new boat in two years’ time. He
estimates the boat will cost $86,600 at that time. He wishes to
deposit an equal sum of money into a BankEast Ltd savings account
every two weeks for the next two years in order to accumulate
enough money to purchase the boat. If the BankEast account is
paying interest at a rate of 14% p.a. compounded annually, how much
must Mr Lee deposit every two weeks?a)...
Following life situations:
Husband/wife, two kids, 1 income, mortgage, good salary, some
savings, and no college fund.
Create a 700- to 1,050-word analysis .
1-Describe the risk tolerance for this life situation
Our professor wants a short report for the followin question. My
class is Signals and Systems. The book we are using is Signals
and systems second edition by Simon Hykin and Barry Van
Veen
(B) Define the following terminologies: noise, interference, and
jamming.
q27. a) you are planning to buy a new caravan to make a trip
around australia. the cost of the van is $225000 and you can get a
loan from the bank for that amount. if you can get a fifteen year
loan at 8.75% per annum compounded fortnightly, how much do you
need to pay every fortnight?
b) suppose you are going to receive $2000 per year for five
years. the appropriate interest is 6% per annum. what is...
Megan is considering the purchase of a new car. She
wants to buy the new Audi A1, which will cost her R347 500. She
will finance 90% of the purchase price at an interest rate of 8%
per annum, with monthly payments over three years. Interest is
compounded monthly. How much money will she still owe on the loan
at the end of one year
So my company wants our employees to install Teramind in their
personal computers during the pandemic because bosses are worried
that our team will slack off. and I received the email from our
manager today about it. Now being the senior team leader, I just
need help writing the first paragraph, which will be a buffer for
the rest of my email to the manager convincing him to not use
Teramind so he can message the superiors. Buffer basically means...
Bryna wants to buy a car that is available at two dealerships.
The price of the car is the same at both dealerships. Best Buggies
would let her make quarterly payments of $2,240 for 5 years at a
quarterly interest rate of 3.72 percent. Her first payment to Best
Buggies would be due in 3 months. If California Cars would let her
make equal monthly payments of $935 for 4 years and if her first
payment to California Cars would...
A company wants to buy a new management information system. The
cost of the system is $10 million, with an additional $1,000,000
for delivery/installation. Immediate net working capital of
$500,000 and an additional net working capital investment of
$250,000 at the end of year one. The system has a life of 10 years.
It will be depreciated as a 7-year asset under MACRS rules. Salvage
value is $1,000,000 at end of 10 years. Tax rate is 24 percent.
Rate of...
Apple wants to buy a new machine that they think will streamline
their packaging of ipads and they want to run some numbers on it to
see if makes sense to proceed.
EBIT = 200 Tax rate 20%
Machine cost 400 salvage value
50 4 yr machine life
Working capital 5 per yr including
startup at time 0
Bond coupon 4%, beta .9 risk free rate 1% mkt risk premium
8%. 30% debt to cap
Calculate IRR, NPV, and payback...