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answer question A and B (A) You have a bank loan of $10,000. You have decided to pay it off with a lump sum of
answer question A and B
(A) You have a bank loan of $10,000. You have decided to pay it off with a lump sum of $12,000 after 2 years. Find the annual rate of interest on this loan. Show your calculation. (1 mark) (B) Ampere Banking Corporation offers two types of certificates of deposit, each requiring a deposit of $10,000. The first one pays $11,271.60 after 24 months, and the second one pays $12,139.47 after 36 months. Find their monthly-compounded rate of return. Show your calculation. (1 mark) (C) In January 2010, the U.S. Treasury issued a $100 par, ten- year, inflation-indexed note with a semi-annual coupon of 5%. On the date of issue, the consumer price index (CPI) was 200. By January 2015, the CPI had decreased to 100. Find the coupon payment that was made in January 2015. Show your calculation. (2 marks) (D) How do bond covenants affect the costs of borrowing? (1 mark)Step by Step Solution
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