Bob signs a note promising to pay Marie $4000 in 8 years at 8%compounded monthly....

Bob signs a note promising to pay Marie $4000 in 8 years at 8% compounded monthly. Then, 148 days before the note is due, Marie sells the note to a bank which discounts the note based on a bank discount rate of 14%. How much did the bank pay Marie for the note?

Expert Solution

Calculation of Maturity Value
Present Value of Bond (PV)	$ 4,000.00
Interest rate(Rate)	8%
Interest rate(Rate)PM	0.67%
Period in Month	96
Maturity Value (FV)	$7,569.83

Calculation of bank pay Marie for the note
Maturity Value (FV)	$7,569.83
Discount Rate	14%
Discount Rate for 148	5.68%
Amount paid by the bank	$ 7,163.19

jeff jeffy answered 2 years ago

Bob signs a note promising to pay Marie $3875 in 3 years at 9.5% compounded monthly....

Bob signs a note promising to pay Marie $3875 in 3 years at 9.5% compounded monthly. Then, 102 days before the note is due, Marie sells the note to a bank which discounts the note based on a bank discount rate of 18.5%. How much did the bank pay Marie for the note? $

What interest will be earned if $6600 is invested for 8 years at 12% compounded monthly?...

What interest will be earned if $6600 is invested for 8 years at 12% compounded monthly? (Round your answer to the nearest cent.) $

31. Ewa signs an instrument unconditionally promising to pay to "Sunny State Bank" $5,000 with interest...

31. Ewa signs an instrument unconditionally promising to pay to "Sunny State Bank" $5,000 with interest in installments with the final payment due June 1, 2016. The instrument that Ewa signed is most likely a. a certificate of deposit. b. a draft. c. an order to pay. d. a promissory note. 32. Ewa signs an instrument unconditionally promising to pay to "Sunny State Bank" $5,000 with interest in installments with the final payment due June 1, 2016. With respect to...

1. If $600 is invested at 8% for three years compounded monthly, what interest is earned?...

1. If $600 is invested at 8% for three years compounded monthly, what interest is earned? 2..If you borrow $7500 for six months at 4% simple interest, how much money must you repay at the end of six months? 3..a. Find the future value of $4500 invested at 3.5% compounded continuously for five years. b. Find the compound interest. 4. Suppose you invest $350 each month in an ordinary annuity which pays 6.2% compounded monthly. What is the future value...

Interest rates are 18% per annum compounded monthly in this entire problem. a. Betty and Bob...

Interest rates are 18% per annum compounded monthly in this entire problem. a. Betty and Bob deposit $100 into a Sinking Fund at the end of each month for 20 years. Algebraically find the account value at the end of the 20 years. Your final answer should be correct to 3 places after the decimal point. b. Bertha purchases a house for $200,000 with a 20 year mortgage of end of month payments. Algebraically find what the monthly payments are....

Edward signs a 30 year mortgage at 3.5% compounded monthly. The price of his house is...

Edward signs a 30 year mortgage at 3.5% compounded monthly. The price of his house is $200,000. He makes a down payment of 40,000. Answer the following: What will be his monthly payments? After 5 years, he makes a one-time payment of $50,000 (against the remaining principle). How many months will he have remaining on his mortgage? To avoid any confusion, he will have exactly 25 years remaining before he makes the $50,000 in payment. Edwards decides that instead of...

1. You deposit $4000 in an account earning 5% interest compounded monthly. How much will you...

1. You deposit $4000 in an account earning 5% interest compounded monthly. How much will you have in the account in 5 years? 2. Find the time required for an investment of 5000 dollars to grow to 6500 dollars at an interest rate of 7.5 percent per year, compounded quarterly. Round your answer to two decimal places Your answer is t=____ years. 3. You deposit $2000 in an account earning 5% interest compounded monthly. How much will you have in...

Sally has a sum of $30000 that she invests at 8% compounded monthly. What equal monthly...

Sally has a sum of $30000 that she invests at 8% compounded monthly. What equal monthly payments can she receive over a period of a) 8 years? Answer = $ b) 17 years? Answer = $

A sum of $10,000 is gaining interest at 8% a year compounded monthly. What is the...

A sum of $10,000 is gaining interest at 8% a year compounded monthly. What is the future worth if you withdrew $25 a month for one year?

3 a) An investment of $11,550 is deposited for 3 years at 2.2% compounded monthly. At...

3 a) An investment of $11,550 is deposited for 3 years at 2.2% compounded monthly. At this point, the interest rate is changed to 1.95% compounded semi-annually. The investment earns interest for 5 more years. What is the value of FV1? b) Money is invested at 8.27% p.a. compounded semi-annually for 39 months. What is the numerical value of n? State your answer with 6 decimals.

Question