1 your family vacation was great but it unfortunately ran a

Reference no: EM13380724

1. Your family vacation was great, but it unfortunately ran a bit over budget. All is not lost. You just received an offer in the mail to transfer your $5,000 balance from your current credit card, which charges an annual rate of 18.7 percent, to a new credit card charging a rate of 9.4 percent. You plan to make payments of $510 at the end the month on this debt. How many less payments will you have to make to pay off this debt if you transfer the balance to the new card?

2. You have your choice of two investment accounts. Investment A is a 5-year annuity that features end-of-month $2,500 payments and has an interest rate of 11.5 percent compounded monthly. Investment B is a 10.5 percent quarterly compounded lump sum investment, also good for five years. How much would you need to invest in B today for it to be worth as much as investment A five years from now?

3. Your friend was injured in an accident, and the insurance company has offered him the choice of $25,000 per year for 15 years, with the first payment being made today, or a lump sum. If a fair return is 7.5%, how large must the lump sum be to leave him as well off financially as with the annuity?

4. You recently inherited $100,000 in a trust fund that pays 6.5% interest. You must spend the money on your college education, and you must withdraw the money in 4 equal installments, beginning immediately. How much could you withdraw today and at the beginning of each of the next 3 years and end up with zero in the account?

5. You are looking at a one-year loan of $10,000. The interest rate is quoted as 8 percent plus 5 points. A point on a loan is simply 1 percent (one percentage point) of the loan amount. Quotes similar to this one are very common with home mortgages. The interest rate quotation in this example requires the borrower to pay 5 points to the lender up front and repay the loan later with 10 percent interest. What is the actual rate you are paying on this loan?

Reference no: EM13380724

Questions Cloud

Question 1calculating cash collections the cobra company : question 1calculating cash collections the cobra company has projected the following quarterly sales amounts for the

Preparing standardized financial statements prepare the : preparing standardized financial statements. prepare the 2009 and 2010 common-size balance sheets for bethesda mining.

You are looking at viacom bonds in which there remain 20 : you are looking at viacom bonds in which there remain 20 years to maturity. the current price of a 1000 par bond is

1 identify an industry of choice which may include the : 1. identify an industry of choice which may include the entertainment food travel housing etc industries. the choice

1 your family vacation was great but it unfortunately ran a : 1. your family vacation was great but it unfortunately ran a bit over budget. all is not lost. you just received an

Challenge problem template1 fasco industries just paid a : challenge problem template1. fasco industries just paid a dividend of d0 1.45. analysts expect the companys dividend

What was the economic failure from a risk management : what was the economic failure from a risk management prospective which caused the company to file for bankruptcy and

Compute the cost of capital for the firm for the following1 : compute the cost of capital for the firm for the following1. a bond that has a 1000.00 par value face value and a

1 find the variances for both the revenue and expenditures : 1. find the variances for both the revenue and expenditures sides and then discuss two to three 2-3 problematic areas

User Account

All Pages