Calculate the size of the new monthly payment

Assignment Help Accounting Basics
Reference no: EM133056789

Question -

a) How much will you pay to buy an asset today that will pay you $10,000 every month, with the first payment beginning nine months from now and the last payment exactly 3 years from now? The account pays 1% interest every month. Show supporting calculations.

b) Richard has just purchased an apartment at a price of $9 million. He made a downpayment of $4 million and financed the remaining balance with a 20-year mortgage at 6% per annum, compounded monthly.

(i) Determine the size of the fixed month-end payments.

(ii) Assume the interest rate increases to 8.4% per annum, compounded monthly immediately after the 44th payment. If Richard decides to keep the number of remaining payments unchanged, calculate the size of the new monthly payment.

Reference no: EM133056789

Questions Cloud

What would be the cost per unit : If these items were bought on 2/10, n/30 terms and the invoice and the freight bill were paid within the 10-day period, what would be the cost per unit
After-tax cost of vovid ltd ordinary shares : VOVID Ltd has a risk free rate of return of 12% and an expected return on the market portfolio of 0.04. It also has a systematic risk of 0.8. Using the Capital
Personal privacy and social media : What are some of the positive and potentially negative effects of organizations using personal social data about customers and employees?
Discuss three types of stocks or investment : Discuss three types of stocks or investment situations for which an analyst could appropriately use P/B in valuation.
Calculate the size of the new monthly payment : If Richard decides to keep the number of remaining payments unchanged, calculate the size of the new monthly payment
Evaluate a private company : Briefly discuss the valuation method that you will use to evaluate a private company and explain why.
Created ethical dilemma : Provide one example of how information technology has created an ethical dilemma that would not have existed before the advent of information technology.
Some of the positive and potentially negative effects : Some of the positive and potentially negative effects of organizations using personal social data about customers and employees
Evaluating capital projects : Why is it critical (please include reference to the 5 principles of finance) to understand relevant cash flow when evaluating capital projects?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Determine the amount of value-added lead time

Determine the amount of value-added and non-value-added lead time and the value-added ratio in this process for an average kitchen appliance

  Compute the amount of under- or overallocated manufacturing

Compute the amount of under- or overallocated manufacturing overhead. Is the amount significant enough to warrant proration of overhead costs

  Calculate time interest earned ratio

Calculate time interest earned ratio. If Profit Before Interest and Tax is 1443630 and Profit for the Year is 1000008

  How much is the total assets as of December

HARANGUE INFLATED SPEECH Co. had the following information for 20x1: Total assets turnover 2:1. How much is the total assets as of December

  How has caused a discrepancy in the account

During bank reconciliation Kevin finds that his company's account has earned interest that has caused a discrepancy in the account.

  What is the macrs depreciation for the computer

Using the excerpt of the MACRS half-year convention table below, what is the MACRS depreciation in year 5 for the computer

  Larrys trampoline stretching machine owed two years was

larry is the sole proprietor of a trampoline shope. during 2014 the following transactions occurred.-unimproved land

  What are the consequences of jims choices

What are the consequences of Jim's choices? Would your answer change if Jennifer was a single mother with three young children, who wanted to get a heads start on finding a new job in the community before everyone else who is being laid off?

  At august 31 the ending inventory consisted of 900 units

the beginning inventory balances of item b on august 1 and the purchases of the item during the month of august were as

  Calculate the discounted payback period

Calculate the discounted payback period of the investment if the discount rate is 11%. Rounding decimals to the nearest whole number

  Make a tabular summary of the effects of alternative

on october 31 the stockholders equity section of omar company consists of common stock 600000 and retained earnings

  When do use asset method and expense method in adjusting

When do you use asset method and expense method in adjusting entries? And when do you use income method and liability method in adjusting?

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