Ken loans his grandson Rex $20,000 at 5.5 percent per year to help pay for executive chef schooling in Florida. Rex requires 3 years of schooling before beginning to earn a salary. He agrees to pay Ken back the loan following the schedule below: "nu-nun \"WM 3. Draw the cash ow diagram from Ken's perspective. b. Find the value of X such that the loan is fully repaid with the last payment. as. What is the dollar amount of each of the 5 payments? {1. Quite by surprise, following successful on-time completion of all payments, Ken gives back to Rex all interest paid. What is the amount of Ken' s check? CTL (Concrete Testing Lab} borrowed $80,000 for new equipment at 8 percent per year, compounded quarterly. It is to be paid back over 3 years in equal quarterly payments. For each part below, use both the interest tables and the Exoel nancial functions. Compare answers between the two. a. How much interest is in the sixth payment? b. How much principal is in the sixth payment? c. What principal is owed immediately following the sixth payment? lCatherine Valentine wants to start sayin g for retirement as soon as she gets a job upon graduation with an MS degree at age 214. She plans to deposit $1,500 at the end of her rst year of work, at age 25, and increase the amount she saves by the same percentage as her salary increases. She thinks her salary increases will be about 6 percent per year and that her money will earn 5 percent per year. How much will she have in the account right after her deposit when she is 60 years old? 41. Consider the following two cash ow series of payments: Series A is a geometric series increasing at a rate of 8 percent per year. The initial cash payment at the end of year 1 is $1,000. The payments occur annually for 5 years. Series B is a uniform series with payments of value X occurring annually at the end of years 1 through 5 . You must make the payments in either Series A or Series B. a. Determine the value of X for which these two series are equivalent if your TVOM is i = 6.5 percent. b. If your WOM is 8 percent, would you be indifferent between these two series of payments? If not, which do you prefer? c. If your TVOM is 5 percent, would you be indifferent between these two series of payments? Ifnot, which do you prefer? 45. Zetterberg Builders is given two options for making payments on a brush hog. Find the value of X such that they would be indifferent between the two cash ow proles if their IVOM is 12 percent per year compounded yearly. _ $150 -_ $200 -_ \" \" 4?. Lucy Lampkin wants to purchase a bond with a face value of $1000 and a bond rate of 6 percent per year, payable at 3 percent semiannually. The bond has a remaining life of 5 years. IfLucy wants to earn at least 8 percent per year compounded semiannually, at what range of prices should she be willing to purchase the bond? 49. You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it immediately after the previous owner received a semiannual interest payment. The bond rate is 6.6 percent per year payable semiannually. You plan to hold the bond for 5 years, selling the bond immediately after you receive the interest payment. If your desired nominal yield is 12 percent per year compounded semiannually, what will be your minimum selling price for the bond