A loan is to be repaid by a series of instalments payable annually in arrcar for...
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A loan is to be repaid by a series of instalments payable annually in arrcar for 15 years. The first instalment is £1,200 and payments increase thereafter by £250 per annum. Repayments are calculated using a rate of interest of 6% per annum effective. Determine: (1) (iii) the capital and interest components of the final instalment. the amount of the loan. the capital outstanding immediately after the 9th instalment has been made. [2] [2] [Total 7] (1) e The force of interest, 8(), is a function of time and at any time t, measured in years, is given by the formula: (0.06 8(r) 0.10-0.01 0≤1≤4 4<1≤7. 0.011-0.04 7<1 [3] Calculate, showing all working, the value at time != 5 of £10,000 due for payment at time - 10. [5] Calculate the constant rate of discount per annum convertible monthly which leads to the same result as in part (1) [2] [Total 7] A one-year forward contract on a share was agreed on 1 September 2015 when the share price was £8.70 and the risk-free force of interest was 7% per annum. The stock was expected to pay a dividend of £1.10 eight months after the date of issue. The price of the share was £9.90 on 1 February 2016 and the risk-free force of interest was 6.5% per annum. The dividend expectation was unchanged. Calculate, showing all working, the value of the contract to the holder of the long forward position on 1 February 2016. [7] A loan is to be repaid by a series of instalments payable annually in arrcar for 15 years. The first instalment is £1,200 and payments increase thereafter by £250 per annum. Repayments are calculated using a rate of interest of 6% per annum effective. Determine: (1) (iii) the capital and interest components of the final instalment. the amount of the loan. the capital outstanding immediately after the 9th instalment has been made. [2] [2] [Total 7] (1) e The force of interest, 8(), is a function of time and at any time t, measured in years, is given by the formula: (0.06 8(r) 0.10-0.01 0≤1≤4 4<1≤7. 0.011-0.04 7<1 [3] Calculate, showing all working, the value at time != 5 of £10,000 due for payment at time - 10. [5] Calculate the constant rate of discount per annum convertible monthly which leads to the same result as in part (1) [2] [Total 7] A one-year forward contract on a share was agreed on 1 September 2015 when the share price was £8.70 and the risk-free force of interest was 7% per annum. The stock was expected to pay a dividend of £1.10 eight months after the date of issue. The price of the share was £9.90 on 1 February 2016 and the risk-free force of interest was 6.5% per annum. The dividend expectation was unchanged. Calculate, showing all working, the value of the contract to the holder of the long forward position on 1 February 2016. [7]
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Related Book For
Engineering Economic Analysis
ISBN: 9780195168075
9th Edition
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
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