What is a good example of a pure discount loan

Assignment Help Financial Accounting

Reference no: EM132659150

Question 1: You want to have $1 million to use for retirement in 35 years.

If you can earn 1% per month, how much do you need to deposit on a monthly basis if the first payment is made in one month?
What if the first payment is made today?
You are considering preferred stock that pays a quarterly dividend of $1.50.
If your desired return is 3% per quarter, how much would you be willing to pay?

Question 2:

What is the definition of an APR?
What is the effective annual rate?
Which rate should you use to compare alternative investments or loans?
Which rate do you need to use in the time value of money calculations?

Question 3:

What is a pure discount loan?
What is a good example of a pure discount loan?
What is an interest-only loan?
What is a good example of an interest-only loan?
What is an amortized loan?
What is a good example of an amortized loan?

Reference no: EM132659150

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