Calculate the semiannual payment

Assignment Help Financial Management
Reference no: EM131913320

a. Calculate the semiannual payment on a $10,000 five year maturity, 8% yield fully amortizing loan. That is, the bank requires a 8% return (yield) and charges the customer 8% interest. (An amortizing security pays principle and interest throughout its life. The payment per period is constant.)

b. What is the duration of the lan in part a? Remember that duration uses cash flows, which you know from part a. The PV or price of a loan when booked is the amount loaned, here $100,000.

Reference no: EM131913320

Questions Cloud

Investing currency is converted to borrowing currency : If you want to keep your profits in $, how much of the investing currency is converted to the borrowing currency?
What is estimate of callahan cost of common equity : If you have equal confidence in the inputs used for the three approaches, what is your estimate of Callahan's cost of common equity?
What is the firm after-tax cost of debt : If the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt?
Maximum possible loss you could experience using straddle : What is the maximum possible loss you could experience using the straddle?
Calculate the semiannual payment : Calculate the semiannual payment on a $10,000 five year maturity, 8% yield fully amortizing loan.
Satisfactory opportunities-sources of investment of funds : Should a company always have "other satisfactory opportunities and sources of investment of funds available" or is it ok to issue the dividends?
Differences between for-profit and nonprofit organizations : What are the differences between For-Profit and Nonprofit organizations?
What is the company cost of equity capital : What is the company’s cost of equity capital?
What is price per share of company stock : What is the price per share of the company's stock?

Reviews

Write a Review

Financial Management Questions & Answers

  Subtracted from the interest payments firm pays

When net new borrowings are subtracted from the interest payments a firm pays to its creditors the result is called the:

  Calculate the fair present values of the bonds

Calculate the fair present values of the following bonds,

  Explain how you would use them to make a decision

Choose two decision-making tools you learned in our materials this week and explain how you would use them to make a decision with an actual problem you have faced in your professional life.

  Contribution margin per unit and total contribution margin

Based on the Break-Even Analysis just performed, what is the contribution margin per unit and the total contribution margin?

  Bond with warrants to compare with cost of straight debt

How would you expect the cost of the bond with warrants to compare with the cost of straight debt?

  How much do you need to deposit each year

How much do you need to deposit each year if your first deposit is now and the last deposit is 18 years from now to achieve this goal.

  Rehabilitating old phosphate mine into rather challenging

Mosaic is rehabilitating an old phosphate mine into a rather challenging golf course.

  Made solely on the basis of project net present value

In what types of situations would capital budgeting decisions be made solely on the basis of project's net present value (NPV)?

  Assumptions are implicitly made by the NPV and IRR methods

The conference on evaluating capital projects has been very helpful. You have received a significant amount of information and multiple projects to evaluate to hone your skills. How does a change in the required rate of return affect the project’s in..

  Using an assumption of semiannual payments

Compute the current price of the bond using an assumption of semiannual payments.

  Responsibility to forecast the sales

Fiat has introduced a new car in the United States called the 500. Assume that your boss has the responsibility to forecast the sales of the 500 in the United States for the year 2012. He believes that Fiat will sell 85,000 of the 500s for 2012. Supp..

  What is the approximate market value of the firm

what is the approximate market value of the firm if the FCFE grows at 2% and the cost of equity is 11%?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd