PART 2: FINANCE

a) Prepare the first row of a loan amortization schedule based on the following information. The loan amount is for $45,460.00 with an annual interest rate of 7.94%. The loan will be repaid over 5 years with monthly payments. Calculate the loan payment, interest portion, principle portion, loan balance after first monthly payment.

b) What is the most you would be willing to pay for a investment that will pay you $82 in one year, $485.00 in two years, and $307.00 in three years, if your required rate of return for this type of investment is 16.63%?

c) Suppose you signed a contract for a special assignment over the next 14 years. You will be paid $15,623.00 at the end of each year. If your required rate of return is 16.29%, what is this contract worth today?

d) You need a loan to purchase new equipment. The loan will be paid off over 10 years with payments made at the end of every quarter. If the stated annual rate is 14.85% and quarterly payments are $517.00, what is the loan amount?

e) You would like to purchase a car for $27,914.00. If the car loan is 8.60% financed over 6 years, what will the monthly payments be for this car?