Making monthly amortization payments

Assignment Help Financial Management
Reference no: EM131918423

1. Mr. John Smith borrowed $200,000 at 7.50% annual interest to buy a house. He has taken a 15 year mortgage and will be making monthly amortization payments. How much will Mr. Smith pay in total interest over the life of this loan?

A $108,667 B. $133,725 C. $225,000 D. $255,168

2. Sara Sharp has invested $50,000 in an account at her local bank. The bank will pay her a constant amount at the end of each year for 6 years and the account's balance will be zero at the end of the sixth year. If the bank has promised Ms Sharp a 10% annual return, how much will they have to pay her each year?

A. $14,763

B. $13,037

C. $12,598

D. $11,480

Reference no: EM131918423

Questions Cloud

Record the purchase of the bond : On July 1st, 2010 Peterson Company purchased a bond with a face value of $300,000. Record the purchase of the bond
Describe few steps-stages of implementation : Why a negotiated agreement can fail at implementation stage and describe few steps/stages of implementation which can avoid failures?
Compare the role of data and information in planning : Compare and contrast the role of data and information in planning, include how data and information are implemented, managed, and accessed.
What we learn from the subprime mortgage crisis : What issues would sustain your interest long enough to write a dissertation on the subject?
Making monthly amortization payments : He has taken a 15 year mortgage and will be making monthly amortization payments.
Example of correlation between marginal cost : 1. Provide an example of correlation between 'marginal cost' and 'average cost."
Compute the tax for each year of the analysis : Problem - Multiyear tax case. Use the 2011 tax rate schedules to compute the tax for each year of the analysis
Explain the effect-direction in the short run : Explain the effect/direction (in the short run) their policy decision would have on
Which is final good produced by bakery : A growing economy is important in order to. Which of the following is a final good produced by a bakery?

Reviews

Write a Review

Financial Management Questions & Answers

  How are forward contracts used to hedge FX risk

How are forward contracts used to hedge FX risk?

  Calculated that the degree of operating leverage

At an output level of 16,500 units, you have calculated that the degree of operating leverage is 2.80. The operating cash flow is $63,500 in this case. Ignore the effect of taxes. What will be the new degree of operating leverage for output levels of..

  Use interest-rate swap to save their borrowing cost

Based on the above information, can Companies A and B use an interest-rate swap to save their borrowing cost? Explain briefly.

  Determine earnings after taxes under this financing plan

Lear Inc. has $950,000 in current assets, $425,000 of which are considered permanent current assets. In addition, the firm has $750,000 invested in fixed assets. Lear wishes to finance all fixed assets and half of its permanent current assets with lo..

  Light of the rather large current account deficits

Explain how this was possible in light of the rather large current account deficits between 2001 and 2009.

  What is the annualized yield to call

A 10-year $1,000 bond with 6% coupon is callable in 2 years at par plus one-half year interest. The bond pays interest semi annually, and the current price of the bond is $960. What is the annualized yield to call?

  Issue new stock to finance its capital budget

Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the company's outstanding bonds is 7.75%, its tax rate is 40%, What is the firm's WACC, assuming it must issue new stock to finan..

  When using the bond-yield-plus-risk-premium method

Root Stock Inc. is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $90..

  Find the price of call option on the stock

Find the price of a call option on the stock that has an strike price of $15 and that expires in 6 months.

  Pay for maintenance of trailing pond

An open-pit mining company must fund an account now to pay for maintenance of a trailing pond in perpetuity after a mining site is shut down in 20 years.

  What constant amount per year must they save

What constant amount per year must they save in order to begin withdrawing $90,000 when they are 60 and have nothing left over at the end of their 85th year?

  What is the real risk-free rate of return

what is the real risk-free rate of return? What is the yield on 3-year Treasury securities?

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