Reference no: EM13875909
Amortization schedule
a) Set up an amortization schedule for a $42,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 6% compounded annually. Round all answers to the nearest cent.
b) What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Round all answers to two decimal places.
c) Why do these percentages change over time?
I. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the balance declines.
II. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the balance declines.
III. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the balance increases.
IV. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the balance increases.
V. These percentages do not change over time; interest and principal are each a constant percentage of the total payment.
|
Specific on the tools of monetary policy
: The economy is slowing down, not growing and unemployment is going up. If you are on the Federal Reserve Board of Governors what type of policy would you pursue? Please be specific on the tools of monetary policy.
|
|
Calculate tammys total return on this investment
: Tammy Jackson purchased 187 shares of All-American Manufacturing Company stock at $34.50 a share. One year later, she sold the stock for $43 a share. She paid her broker a $36 commission when she purchased the stock and a $45 commission when she sold..
|
|
Advantages to buying mutual funds over individual stocks
: Explain mutual funds. Explain three advantages to buying mutual funds over individual stocks. Please explain the difference between an actively traded fund vs. and indexed fund.
|
|
Differentiate between accrual accounting and cash basis
: Bob’s personal wealth including investments in land, stocks, and bonds is about $14,000,000. He reported an interest income of $20,000 and dividend income of $6,000 last year. The $14,000,000 includes land worth $9,000,000 that Bob bought in 1966 for..
|
|
Amortization schedule
: Set up an amortization schedule for a $42,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 6% compounded annually. Round all answers to the nearest cent. What percentage of the payment represent..
|
|
Evaluating an extra dividend versus share repurchase
: Wally’s Penguins is evaluating an extra dividend versus a share repurchase. In either case, $5,500 would be spent. Current earnings are $1 per share, and the stock currently sells for $27 per share. There are 2,500 shares outstanding. Ignore taxes an..
|
|
Excess cash to complete a stock repurchase
: Remington’s has a market value equal to its book value. Currently, the firm has excess cash of $1,200, other assets of $5,800, and equity valued at $3,750. The firm has 250 shares of stock outstanding and net income of $420. What will the new earning..
|
|
What is the firms cost of equity
: Tina Fashions is expected to pay an annual dividend of $1.10 a share next year. The market price of the stock is $21.80 and the growth rate is 4.5 percent. What is the firm's cost of equity?
|
|
Debt to capital ratio-firm is in stable growth
: Caballos, Inc., has a debt to capital ratio of 27%, a beta of 1.3 and a pre-tax cost of debt of 5.7%. The firm had earnings before interest and taxes of $ 630 million for the last fiscal year, after depreciation charges of $ 234 million. Assume that ..
|