The discount rate on a T-Bill is always a simple annual interest rate, using the formula, D= PVrt where D is discount, PV is present value, r is rate and t is time years. The maturity times and discount rates for $20,000 T-bills sold on July 8, 2019, are given. Find the discount amount and the price of each T- bill. (a) one year; 0.52% (b) six months; 0.35% (c) three months: 0.26%
Q: In 2015, Cart Inc. adopted a plan to accumulate funds for environmental remediation beginning July…
A: Future value is the estimation of the current value of cash flows that are likely to be received in…
Q: Today, is January 4, 2016. IBM common stock is selling at $135.95 per share. The stock has a…
A: A stock trader typically has access to price information on a company or stock portfolio on…
Q: Find the present value of $3000 payable at the end of 4 years, if money may be invested at 4% with…
A: Continuous compounding is a method of calculating interest where the interest is calculated and…
Q: Your friend just got their $14446 tax return. They would like to invest it into a stock that they…
A: Future Value refers to the value of an investment or asset at a specific point in the future,…
Q: What are some alternative reforms that could be proposed to resolve the continuing problems in…
A: Campaign finance law regulates the funding of political campaigns, including the sources and amounts…
Q: An investor invests £9,000,000 in a new factory, which takes a year to build. After construction is…
A: The yield represents the total profit or return generated by an investment relative to the amount of…
Q: If EAR is 20% with monthly compounding, what is the nominal rate? 15.29% 18.37% 20.99% 14.05%
A: Effective annual rate (EAR), is a rate that shows the total amount of interest that will be earned…
Q: If the concern is for the value that existing money will have next year, the formula for the…
A: Present value (PV) is the current value of a future payment, stream of payments, or investment,…
Q: Suppose a company could invest in a machine that would be able to produce $1,000,000 worth of…
A: Cash flow for year 1 = cf1 = $1,000,000 Cash flow for year 2 = cf2 = $2,000,000 Cash flow for year 3…
Q: REFLECTING Should Jill consider a payday loan to purchase the refrigerator? Explain. 2. Jill is…
A: Loans are taken when an individual needs fund to buy something or to meet some emergency like a…
Q: Your brother-in-law borrowed $2,000 from you 4 years ago and then disappeared. Yesterday he returned…
A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…
Q: Assume these are the stock market and Treasury bill returns for a 5-year period: Year Stock Market…
A: The risk premium is referred to as the difference between the market return and the risk-free…
Q: What is the present value of $5,000 that will be paid to you eight years from today at 8% interest?
A: Data given: FV=$5000 n=8 years i=8% (assumed compounded annually) Required= PV
Q: Suppose you are offered the alternative of receiving either $3,000 at the end of 8 years or $2,000…
A: To calculate the interest rate we will use the below formula Interest rate = (F/P)1/n-1 Where P -…
Q: It says $60.08 is incorrect
A: Information Provided: Dividend at the end of the year = $4.45 Required return = 16% Growth rate =…
Q: Purchase (Cash) Price $3,100 Down Payment 20% $ Amount Financed Monthly Number of Payment Payments…
A: Step 1 Deferred Payment An investment's right to postpone payments is known as a deferred payment…
Q: Mrs. Rodrigues has made deposits of $850 at the end of every six months for twenty-five years. If…
A: The FV of an investment refers to the value of the cash flows of the investment assuming that they…
Q: Methods of entering a foreign market, including the advantages and disadvantages of each.
A: There are several methods that companies can use to enter a foreign market, each with its own…
Q: Find the future value of the following investment. Nominal Frequency of Conversion Rate 6.2%…
A: Information provided: Principal "P" = $8500 Nominal rate "r" = 6.2% Number of compunding "m"= 4 Time…
Q: a) Suppose you are the CEO of a company and are considering investing in a new project that has an…
A: Solution: Decision regarding investing in a project or not depends upon the Net Present Value (NPV)…
Q: There is an increasing demand for students’ loans to finance graduate and post-graduate studies to…
A: It takes a thorough grasp of the market, the capabilities of the financial institution, and the…
Q: 2. a) What are the advantages of a home equity line of credit? b) What are the disadvantages of a…
A: Home Equity Line of Credit (HELOC): HELOC represents a line of credit that can be borrowed against…
Q: You are interested in a zero-coupon bond with one year left to maturity. The bond has the face value…
A: A bond is a debt instrument that allows corporations to raise capital from their investors. It is…
Q: You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it…
A:
Q: a) Suppose you have $10,000 to invest in a savings account, and you have two investment options…
A: Given Investment amount 10000 rates 5% and $4.5%
Q: Calculate the average daily balance (in $) for October for a revolving credit account with a…
A: To calculate the average daily balance for a revolving credit account, we need to determine the…
Q: 3. You just bought a bond for $950 that matures in 3 years, makes annual coupon payments of 7.00 %,…
A: Yield to maturity (YTM) and current yield are two important measures of return on investment for…
Q: Consolidated Industries 11% bonds pay interest annually. The bonds sell for $899 and have a par…
A: To calculate the yield to maturity (YTM) of a bond, you need to take into account its current market…
Q: The Ewert Exploration Company is considering two mutually exclusive plans for extracting oil on…
A: a) Incremental cash flows is determined by subtracting cash flow of A from B. Result/Answer:
Q: Future value (with changing years). Dixie Bank offers a certificate of deposit with an option to…
A: The amount of money invested over a period of time with the assumption of investment growth at a…
Q: Inflation premium is expected to decrease by 0.02 percent annually in the next 30 years, while…
A: In finance yield curve holds a very important place. Yield curve refers to that line which shows or…
Q: Find the present value of a fifteen year ordinary annuity that pays $1,340 monthly if the interest…
A: The PV of the annuity is the present worth of the constant amount that has to paid or received in…
Q: Coupon payments are fixed, but the percentage return that investors receive varies based on market…
A: Step 1 YTM Yield to maturity (YTM) is the overall rate of return that a bond will have earned once…
Q: * Your answer is incorrect. Marigold Inc. manufactures cycling equipment. Recently, the vice…
A: A bond is a debt instrument that provides the company with the required capital from investors…
Q: 5. Kumal wants to sell her townhouse in Whitehorse. She will spend $2100 updating her home. She has…
A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…
Q: A mutual fund with K100 million in assets at the start of the year and with 10 million shares…
A:
Q: Present value (with changing years). When they are first born, Grandma gives each of her…
A: The PV of an investment refers to the value of the cash flows after they have been discounted at an…
Q: Under Armour's Strategy in 2019: Its Struggle to Revive North American Sales and Profitability…
A: (1) Company's current performance: Under Armour is a leading global athletic apparel and footwear…
Q: You establish a straddle on ZLAB using a call and a put option with the same expiration date and the…
A: A Straddle is an options trading strategy that involves buying both a call option and a put option…
Q: Japanese yen is trading at ¥130 per US dollar. The forecast for yen next year is that it will…
A: The conditional volatility of the one year ahead exchange rate can be calculated using the following…
Q: What is the future worth of $1,000 in month 1, $1,040 in month 2, and amounts increasing by $40 per…
A: Time value of money states that a dollar worth today is more than the same amount in the future. We…
Q: Calculate the finance charge (in $), the finance charge per $100 (in $), and the annual percentage…
A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…
Q: The manger of a technology store wants to save $40,000 in 3 years to make a down payment on a…
A: Effective annual rate of interest When the benefits of compounding over time are taken into account,…
Q: The Aubey Coffee Company is evaluating the within-plant distribution system for its new roasting,…
A: Step 1 The internal rate of return approach uses a discount rate that makes the net present value of…
Q: You have calculated the value of an investment to be $100. If it costs $105, you should buy it.…
A: To make an informed decision, it is essential to understand the concept of intrinsic value, which is…
Q: irgate Nation atu Kawan trial Ar The company needs to raise funds for its planned expansion into the…
A: Step 1 The minimum rate of return or profit that a business must achieve before creating value is…
Q: Give typing answer with explanation and conclusion Which of the following statements is CORRECT?…
A: Diversified portfolio An investor's total risk profile is decreased by a diversified portfolio,…
Q: Draw a work breakdown structure to organize the control accounts with their respective work…
A: Here's a possible work breakdown structure (WBS) for the National Water Enhancement Project (NWEP)…
Q: Use the data in the tables below to answer the following questions: Average rates of return on…
A: Step 1 With maturity of one year or less, a Treasury Bill (T-Bill) is a short-term obligation of the…
Q: Which of the following does NOT set the upper limit on the amount of cash dividend that a company…
A: The correct answer is none of them - all of these factors can limit the amount of cash dividend a…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- Calculate the interest due for the monthly installment payment on a loan given the remaining principal and interest rate.Remaining principal = $22,021.59, interest rate = 13.3% Interest due = $ (Give your answer rounded to the nearest hundredth)Assume that at time 0 a sum L is lent for a series of n yearly payments. The rth payment, of amount xr, is due at the end of the rth year. Let the effective annual interest rate for the rth year be ir. Give an identity which expresses L in terms of the xr and ir.The loan below was paid in full before its due date: (a). Obtain the value of h from the annual percentage rate table. Then (b) use the actuarial method to find the amount of unearned interest, and (c) find the payoff amount. Regular Monthly Payment $494.14 APR 4.0% Remaining Number of Scheduled Payments after Payo!! 12 Click the icon to view the annual percentage rate table. (b) The unearned interest is (Round to the nearest cent as needed) (c) The payoff amount is $(Round to the nearest cent as needed)
- You've borrowed $6,903.71 and agreed to pay back the loan with monthly payments of $270. Assume the interest rate is 15% stated as an APR. a. How long will it take you to pay back the loan? Note: Do not round intermediate calculations. Round your answer to the nearest whole number. Number of months b. What is the effective annual rate on the loan? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Effective annual rate %What is the effective interest rate (APY) for a loan of $8,500 at 12% APR compounded monthly? use the formula method.2) On January 1 ", a borrower takes-out a 5/1 ARM for 20 years bearing initial APR of 5.5 %. Thereafter, during the loan's adjustable period, interest will be 2.5 % over CPI, adjusting annually. (a) How does this 5/1 ARM protect the lender from risk? (b) If the CPI on January 1"is 6 %, what is the interest rate during the loan's first year? (c) If the borrower was also offered a 10/1 ARM (as an alternative to the 5/1 ARM), how would the margin of the 10/1 ARM likely differ from the margin of the 5/1 ARM?
- Compute the amount of interest on $8350 at 6.5% p.a. from October 8, 2019, to August 4, 2020. What rate of interest is paid if the interest on a loan of $12500 is $196.06 from November 14, 2019, to May 20, 2020? Loan payments of $1725 due today, $510 due in 75 days, and $655 due in 323 days are to be combined into a single payment to be made 115 days from now. What is that single payment if money is worth 8.5% p.a. and the focal date is 115 days from now? What principal will earn $355.99 interest at 9.75% p.a. from February 4, 2017, to July 6, 2017? Determine the face value of a four-month promissory note dated May 20, 2018, with interest at 7.5% p.a. if the maturity value of the note is $1190.03. A Company sells locks for $10 each. Manufacturing cost is $2.60 per lock; marketing costs are $2.40 per lock; and royalty payments are 20% of the selling price. The fixed cost of preparing the lock is $18 000. Capacity is 15,000 locks. Compute the contribution…Consider a $150,000 loan with an annual interest rate of 6.5 percent and a 30-year term. Discount points are equal to 2 percent. All other up-front financing costs to be paid by the borrower total $3,000. Compute the monthly payment and the loan balance at the end of months 1–6. What is the effective borrowing cost (EBC), assuming that the loan remains outstanding to maturity?The loan below was paid in full before its due date. (a) Obtain the value of h from the annual percentage rate table. Then (b) use the actuarial method to find the amount of unearned interest, and (c) find the payoff amount. Regular Monthly Payment $414.84 APR 4.0% Remaining Number of Scheduled Payments after Payoff 18 Click the icon to view the annual percentage rate table. ... (a) h= $3.20 (b) The unearned interest is $ (Round to the nearest cent as needed.)
- Find the APR (true annual interest rate), to the nearest half percent, for the following loan. Amount Finance Number of Financed Charge Monthly Payments $2800 $100 12 Click the icon to view the annual percentage rate table. The annual percentage rate is %. Enter your answer in the answer box.A lender makes a loan of $100,000 at a 6% interest rate for 25 years with monthly payments. The lender will require an origination fee of $1,000 and will also discount the loan by some amount. Suppose the lender discounts the loan by the amount calculated in the last question. What is the annual percentage rate (APR) on this loan? a. 5.45% b. 6.00% c. 6.11% d.6.20% e. 6.65% Assume the borrower repays the loan after 8 years. What is the effective borrowing cost (EBC) on this loan? a. 6.10 b. 6.17 c. 6.33 d. 6.50 e. 6.84For each of the following cases, indicate (a) what interest rate columns and (b) what number of periods you would refer to in looking up the discount rate. (1) In Table 3 (present value of 1): Case A Case B Case C Case A Case B Case C Annual Rate 9% 12% 10% (a) Number of Years Invested 5 14 10 % % % Discounts per Year Annually Semiannually Semiannually (b) periods periods periods