Question
1)You decided to close your loan that you have to purchase Harley Davidson. You already made 12 monthly payments, how much you need to pay
1)You decided to close your loan that you have to purchase Harley Davidson. You already made 12 monthly payments, how much you need to pay to the bank (your ending loan amount)? 2)In 2020, interest rates were 12% and the rate of inflation was 10% in the country X. What was the real interest rate in 2020? 3) What is your EAR if an account pays 1,5% per month? 4)What is your monthly rate if EAR is 15%? 5)Suppose the term structure of risk-free interest rates is as shown below:
Calculate the present value of an investment that pays $1000 in one year, $1000 in two years, and $5000 in five years for certain.
Term | 1 year | 2 years | 3 years | 4 years | 5 years | 6 years | 7 years | 8 years | 9 years |
Rate (EAR%) | 0.5% | 1.5% | 1.8% | 2% | 2.2% | 2.5% | 2.8% | 3% | 3.5% |
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