Calculate the amount of each quarterly payment

Assignment Help Financial Management

Reference no: EM132031119

Consider a loan of $75000.00 repayable by equal quarterly instalments over 15 years calculated at an interest rate of 08.80% per annum convertible quarterly. From the lender's perspective, set a cash flow model in tabular form which covers all the scheduled repayments in the 15 years, allowing for tax at 30% on the interest component of the loan. (a) Calculate the amount of each quarterly payment. (b) calculate the after tax internal rate of return achieved by the lender on its investment over this loan to an accuracy of 0.01%, assuming that the borrower follows the loan schedule and there is no default.

ATTACH ANSWER IN EXCEL SPREADSHEET.

Reference no: EM132031119

Questions Cloud

Seeking any external funding : What is the maximum growth rate the company can achieve without seeking any external funding?

Examine the leadership styles that you have used in the past : Examine the leadership styles that you have used in the past. Give specific examples of different situations where you used different styles.

What is the standard deviation of the given returns : Over the past six years, a stock had annual returns of 14 percent, -3 percent, 8 percent, 21 percent, -16 percent, and 4 percent, respectively.

What is the stock beta coefficient : A stock has a required return of 12%. The risk-free rate is 6% and the market risk premium is 5%. What is the stock's beta coefficient?

Calculate the amount of each quarterly payment : Calculate the amount of each quarterly payment.

Explain the risk management and vulnerability assessment : Defining and explaining the levels of physical security, risk management and vulnerability assessment, along with their purposes.

What are challenges or problems encountered by the firm : What are challenges or problems encountered by the firm due current assets and current liabilities in the short run and what are the possible solutions?

What is the ear of the lower-cost loan : PDQ Enterprise can borrow from its bank using a one-year (a) simple interest loan with a 12 percent quoted rate and no compensating balance.

How would national sales tax affect the accounting industry : The tax code is extremely difficult for some to understand, How would a national sales tax affect the accounting industry, and in particular the tax industry

User Account

All Pages