Making semiannual interest payments

Assignment Help Financial Management
Reference no: EM131499629

A loan of 5,000 is repaid by making semiannual interest payments to the lender at a nominal rate of interest of 10% per annum compounded semiannually; and making quarterly sinking fund deposits that will accumulate to the original loan amount at the end of 5 years. The sinking fund earns a nominal rate of interest of 6% per annum compounded monthly. Find the net amount of the loan at the end of 3.5 years.

Reference no: EM131499629

Questions Cloud

What will be the current market price of the firms bonds : Assuming semiannual coupon payments, what will be the current market price of the firm’s bonds?
What is the required return of cash-marts shareholders : Pay-Day Banks Inc. is a short-term lender. What is the required return of Cash-Mart's shareholders?
It is indifferent to the two forms of payment : what final payment will the bank require you to make so that it is indifferent to the two forms of payment?
The wheat harvesting season-utilization rate for bin area : The wheat harvesting season in the American Midwest is short and farmers deliver their truckloads of wheat to giant central storage bin within two-week span.
Making semiannual interest payments : A loan of 5,000 is repaid by making semiannual interest payments to the lender at a nominal rate of interest of 10% per annum compounded semiannually;
Investment project is estimated to have after-tax cash flows : A capital investment project is estimated to have the following after-tax cash flows, by year:
Arithmetic and geometric returns for the stock : what are the arithmetic and geometric returns for the stock?
Level monthly payments at an effective annual interest rate : Elaine will repay the mortgage over 20 years with level monthly payments at an effective annual interest rate of 8%.
What price do you expect art shares to sell for in four year : What price do you expect ART shares to sell for in 4 years?

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the leverage adjusted duration gap for balthazar

Balthazar's savings bank has assets of 2 million invested in 20 year, 10% coupon Treasury bonds selling at par with duration 7.70 years. Liabilities of 1.8 million are financed with a two year, 8% coupon selling at par. Calculate the leverage adjuste..

  Average annual growth rate of dividends for this firm

A firm's dividends have grown over the last several years. 5 years ago the firm paid a dividend of $2. Yesterday it paid a dividend of $7. What was the average annual growth rate of dividends for this firm?

  The net means taking into account the premium on option

Suppose the market price of UWY stock at expiration is $32.84. Assume that both George and Julie are rational in the sense that if they could choose to exercise the option, then they would do so rationally. The "net" means taking into account the pre..

  Security percent of portfolio beta

Security Percent of portfolio Beta. Calculate the beta portfolio

  Determine the costs to be capitalised

Autocar Inc, a motor vehicle manufacturer, has a research division that worked on the following projects during 2004:- Determine the costs to be capitalised.

  What is the equivalent present worth for the investment

A $90,000 investment is made. Over a 5-year period, a return of $30,000 occurs at the end of the first year. Each successive year yields a return that is 7% less than the previous year’s return. If money is worth 5%, what is the equivalent present wo..

  About how much is the annual payment

You need $275,000 to start a business. A bank will loan you the money at 7.63% for 20 years with annual payments. About how much is the annual payment?

  Considering buying an investment

You are considering buying an investment that will be worth $55,000 when it matures in two years. If you want a rate of return of at least 15% compounding quarterly, what is the most you should be willing to pay for this investment?

  Considering installing a new molding machine

Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $73,000 a year for 7 years. At the beginning of the project, inventory will decrease by $16,000, accounts receivables will increase by ..

  What is its cost of common equity

Patton Paints Corporation has a target capital structure of 25% debt and 75% common equity, with no preferred stock. It’s before-tax cost of debt is 12% and its marginal tax rate is 40%. The current stock price is P0 = $31.00. The last dividend was D..

  What is the worth of the bond

Rockne, Inc., has outstanding bonds that will mature in six years and pay an 8 percent coupon semiannually. If you paid $1,052.57 today and your required rate of return was 6.29 percent. What is the worth of the bond?

  Global financial crisis and eurozone sovereign debt crisis

Countries around the world are still struggling to reenergize their sluggish economies from the impact of the Global Financial Crisis (GFC) and the Eurozone Sovereign Debt Crisis. What treasury management strategies would you recommend for a sustaina..

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