What are the monthly payments required to amortize this loan

Assignment Help Financial Management
Reference no: EM131526703

1. A gallon of milk costs $3.59 today. How much will it cost you to buy a gallon of milk for your grandchildren in 35 years if inflation averages 5% per year and milk prices increase along with the overall rate of inflation?

a. $3.77

b. $6.28

c. $12.34

d. $19.80

2. You borrow $95,000 and agree to pay the interest and principal in monthly installments over the next 12 years. The annual interest rate of 12%. What are the monthly payments required to amortize this loan?

a. $1,248

b. $1,336

c. $1,400

d. $3,936

3. Compound interest can best be described as:

a. interest earned on the original principal

b. the discount rate

c. interest earned on interest only

d. interest earned on interest and interest earned on the original principal

Reference no: EM131526703

Questions Cloud

Why the use of the after-tax cost of debt : explain (i) why the use of the after-tax cost of debt and not the actual cost of debt
You need to deposit at the beginning of each year : How much do you need to deposit at the beginning of each year to have enough saved to pay for the plot in 60 years, if you can earn 11% on your deposit?
Good reason for company to go public : Which of the following is a good reason for a company to go public?
How much money if any was left on-the-table : At the end of the day, the price was $39. The current price is $35. How much money, if any, was left on-the-table?
What are the monthly payments required to amortize this loan : What are the monthly payments required to amortize this loan? Compound interest can best be described as:
How much will the investment banker receive : How much will the investment banker receive if all shares sell at the expected price?
Expected and required rates of return : Expected and required rates of return Assume that the risk-free rate is 5% and the market risk premium is 5%.
The account at the end of that time period : How much money will be in the account at the end of that time period?
What is real rate of return for large-cap stocks : What is the real rate of return for large-cap stocks?

Reviews

Write a Review

Financial Management Questions & Answers

  The percent price change due to both duration and convexity

A 5.5% coupon bearing bond that pays interest semi-annually has a yield to maturity of 4.8% per year. This bond has a duration of 10 years and a convexity of 157. If the market yield decreases 60 basis points, calculate an estimate of the percent pri..

  Choose a health maintenance organization

In which organization would you expect to have an easier time getting an appointment to see your doctor? Explain.

  What will be the immediate effects on the earnings per share

What will be the immediate effects on the earnings per share of Jordan if it acquires Konrad or Loomis at their current market prices by the exchange of stock based on the current market prices of each of the companies?

  Market risk premium and real risk-free rate

Calculate the required rate of return for Manning Enterprises assuming that investors expect a 4.3% rate of inflation in the future. The real risk-free rate is 1%, and the market risk premium is 4%. Manning has a beta of 1.9, and its realized rate of..

  Numerator in computing return on investment-flexible budget

A static budget report is appropriate for. The flexible budget report includes all of the following sections except. Controllable fixed costs are deducted from the contribution margin to arrive at.  The numerator in computing return on investment is

  Include percentages in the income statement

Include percentages in the Income Statement (vertical analysis) i.e., gross profit percentage, % of selling expenses to sales, etc. (common sizing and vertical analysis are basically the same analysis techniques - every number in the multi-step in..

  How much can the lab afford to pay for the mri machine

A medical lab wants to upgrade its MRI machine. How much can the lab afford to pay for the MRI machine?

  Investors attempt to neither buy nor sell shares of asset

You have come across an asset that pays no dividends but has an expected price of $100 an year from now. The correlation of this asset with the market portfolio is believed to be 0.5. The standard deviation of the return is believed to be 30%. Accord..

  What will its current price per share be

If it expects to keep the same payout ratio, and to earn 20% on future investments forever, what will its current price per share be? Assume that the cost of capital is 15%.

  Purchasing power parity-why emerging-market currencies

Purchasing Power Parity: Corporate financial managers must constantly monitor the foreign exchange markets when their firm is operating internationally. A popular index that tracks the Law of One Price is the Big Mac Index. This index is reported reg..

  Variable cost per unit of production on net present value

If a firm wanted to find the effect of a change in the variable cost per unit of production on the net present value of a project, then the firm might perform:

  International financial strategy in foreign exchange

How effective is Sony's international financial strategy in Foreign Exchange

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