Reference no: EM131063131
1. Suppose Mary Jane wishes to take our a 30-year interest-only mortgage loan of $200,000 with an interest rate of 8%. How much will Mary Jane pay the lender EACH MONTH?
2. You are considering a 5%, 15-year mortgage with zero points. Noting that mortgage payments are made monthly, calculate your payment and effective annual rate. The loan is for $300,000. PLEASE WORK THIS PROBLEM CAREFULLY.
3. You are considering a 4.5%, 15-year mortgage with 2.5 points. Noting that mortgage payments are made monthly, calculate your payment and effective annual rate. The loan is for $300,000. PLEASE WORK THIS PROBLEM CAREFULLY.
4. Suppose you have a choice between (1) the 5%, 15-year mortgage and (2) the 4.5% mortgage with 2.5 discount points. Note that choosing the 2.5 discount point loan will save you $77.40 per month. If you go for the discount point loan, what is the minimum length of time you should keep the mortgage for the savings to outweigh the upfront cost? Note that upfront cost = 2.5% of $300,000 = $7,500. To answer this question, you need to determine when the present value of the savings equals the $7,500 upfront cost. PLEASE WORK THIS PROBLEM CAREFULLY.
|
Futures contract and collar based on gold options
: You have just been hired as the finance director of a firm that mines gold from a gold mine and sells gold on the world market. Production is stable, but you notice that the spot price of gold varies a lot. Compare the following two strategies for he..
|
|
What is average annual rate of return earned on investment
: Fifteen years ago, you put away $5,000. Today, that investment is now worth $16,535. What is the average annual rate of return you earned on your investment?
|
|
What is the forward price of gold with delivery
: The current price of gold is $1,600 per troy ounce. There are no storage costs. The risk free rate of interest is 5% continuously compounded. What is the forward price of gold with delivery in 3 months? Calculate the cost of a collar, with 3 months t..
|
|
Financial ratios and common-size financial statements
: State why Walmart is a competitor of Target. Identify the reason that financial ratios and common-size financial statements are more important when contrasting the financial performance of Target to Walmart than the financial amounts reported on the ..
|
|
Calculate your payment and effective annual rate
: Suppose Mary Jane wishes to take our a 30-year interest-only mortgage loan of $200,000 with an interest rate of 8%. How much will Mary Jane pay the lender EACH MONTH? You are considering a 5%, 15-year mortgage with zero points. Noting that mortgage p..
|
|
Required return that brigham common stock should provide
: Brigham Jewellery Corporatio9n common stock has a beta, B, of 1.8. The risk free rate is 5%, and the market return is 16%. Determine the risk premium on Brigham common stock should provide. Determine the required return that Brigham common stock shou..
|
|
Family limited partnership is one option in estate planning
: A family limited partnership is one option in estate planning that is effective in certain situations. In this discussion, you explore situations appropriate for this option and consider the pros and cons.
|
|
Calculated from the capital asset pricing model
: Investment in portfolio A has a standard deviation of 9%, while investment in portfolio B has a standard deviation of 14%. In order to tolerate the increased risk, what would you as an investor expect? The required rate of return for an investment ca..
|
|
Prior to consideration of working capital
: A potential project with is expected to generate the following revenue per annum for the next 6 years with a after-tax operating cash flow margin of 20% (prior to consideration of working capital) from new business with a government agency. Now consi..
|