Describe how to set up a loan amortization schedule

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Reference no: EM13928582

1. Explain how future value of an annuity interest factors can be used to solve a sinking fund problem.

2. Describe how to set up a loan amortization schedule.

3. November 21, 1980, was the day of a tragic fire in the MGM Grand Hotel in Las Vegas. At the time of the fire, the hotel had only $30 million of liability insurance. One month after the fire, the hotel bought an extra $170 million of liability cover- age for a premium of $37.5 million, retroactive to November 1, 1980 (before the fire). Based on your knowledge of present value concepts, why would insurers be willing to issue insurance to MGM under these conditions?

Reference no: EM13928582

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