6. A car loan of 25,000 is repaid by end-of-month payments of $463.43. If interest in 7.5% compounded monthly, for how long are they payments made?
7. Maria has set a goal to save $10,000 in a savings account that earns 2.4% compounded annually. How much must she deposit each year for five years if the deposits are made at the end of each year.
8. A fund of $30,000 has been set up to pay for Edwin's music lessons over the next twelve years. If interest is 6.21% compounded monthly, what is the size of each month-end withdrawal from the fund?
9.Kirstie's mortgage is repaid over 20 years by payments of $1055.00 made at the end of each month. If interest is 5.2% compounded semi-annually, what is the mortgage principal.
10.Neena wants to accumulate $18,000 in a fund earning 3.6% compounded semi-annually. How much must she deposit at the end of each year for eight years?
11.What sum of money can be withdrawn from a fund of $15,750 invested at 4.25% compounded semiannually.
A) at the end of every month for 12 years.
B) at the end of ah year for fifteen years 12.At what nominal annual rate of interest compounded semi-annually will a $135,000 mortgage be amortized by monthly payments of $1023.12 over 15 years?
13. A $28,000 mortgage is amortized by quarterly payments over twenty years. The mortgage is renewable after three years and interest is 6% compounded semi-annually.
A) What is the size of the quarterly payments.
B) How much interest will be paid during the first year?
C) What is the balance at the end of the three year term.
14. The superior Tool Company is repaying debt of $16,000 by payments of $1000 made at the end of every three months. Interest is 7.5% compounded monthly.
A) How many payments are needed to repay the debt?
B) What is the size of the final payment 15. Wells Inc. has to choose between two investment alternatives. Alternative A will return the company $20,000 after three years, $60,000 after sex years, and $40,000 after ten years. Alternative B will bring returns of $10,000 per year for ten years. If the company expects a return of 14% on investments, which alternative should it choose?
16.A piece of property may be acquired by making an immediate payment of $25,000 and payments of $37,500 and $50,000 three and five years from now respectively. Alternatively the, the property may be purchased by making quarterly payments of $5150 in advance for five years. Which alternative is
preferable if money is worth 15% compounded semi-annually.
17. An investor has two investment alternatives. If he chooses alternative 1, he will have to make an immediate outlay of $7000 and will receive $500 every three months for the next nine years. If he chooses alternative 2, he will have to make an immediate outlay of $6500 and will receive $26,000 after eight years. If interest is 12% compounded quarterly, which alternative should the investor choose on the basis of the net present value criterion?
18. Replacing old equipment at an immediate cost of $65,000 and $40,000 five years from now will result in a savings of $8000 semi-annually for ten years. At 14% compounded annually, should the old equipment be replaced?
This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.
This is only a preview of the solution. Please use the purchase button to see the entire solution