MUST SHOW WORK!!!

1. Hope has just bought a new house, which costs $525,000. She put down $100,000 as a down payment and borrowed the rest. Hope took a 20-year loan with the first monthly payment due in exactly one month. The mortgage rate is 4.70% APR. Show your work and highlight your final answers.MUST SHOW WORK!!!

1. What is Hopes monthly payment?

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2. After four years of payments, what is her outstanding balance on the mortgage?

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3. Ignore part (b). Hope decides to make an extra $200 pre-payment per month in addition to her regular monthly payment as computed in part (a). How many years sooner can she pay off the mortgage?

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2.

Chris borrowed $200,000 to be repaid in 120 equal monthly installments, beginning one month from today. The interest rate on the loan is 5.5% APR, compounded monthly. How much principal on the loan will Chris pay down in the second month? Show your work and highlight your final answers. MUST SHOW WORK!!!

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3, Firm HDNets balance sheet is provided below. The firms current stock price is $45 per share. There are 25 shares outstanding in total. The firms total earnings at the firms level (not at per share level) in the past 12 months are $50. The firm pays dividends at $0.30 per share per quarter. MUST SHOW WORK!!!

Current Assets: $120	Current Liabilities: $60
	Long Term Debt: $250
Fixed Assets: $430	Owners Equity: $____

Compute the following. Show your work and highlight your final answers.

1. Market capitalization =

2. Market to book ratio =

3. P/E ratio =

4. Dividend yield =

4.Google went public 18 years ago in 2004 with an IPO. The closing pricing on the first days trade was $100.34. Today, the stock price is $2,233. Compute the annualized rate of return on the stock. Assume you invested $500 in the stock 18 years ago. How much is the value of your holdings today? Show your work and highlight your final answers. MUST SHOW WORK!!!

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5. The Florida Lotto carries an estimated jackpot of $45 million. Suppose that you are the only winner of the jackpot and you are given two options to claim your winnings:

(1) Installment option: 30 equal installments of $1.5 million ($45 million / 30 = $1.5 million) at the beginning of each year for the next 30 years.

(2) Cash option: a lump sum of $23.9 million today.

. Ignore taxes and assume your rate of return is 4.75% per year. Which option is more valuable? Show your work and highlight your final answers.

MUST SHOW WORK!!!

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