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Please give me solution and pick from multiple choice Luke borrows $750,000 from ANZ to set up a medical practice. He agrees to pay a

Please give me solution and pick from multiple choice

Luke borrows $750,000 from ANZ to set up a medical practice. He agrees to pay a fixed interest rate of 12% per annum compounding monthly and to repay by equal monthly instalments over 25 years. Calculate the monthly repayment and the remaining loan after making 36 monthly repayments.

a.

The monthly repayment is $7,899.18 and the outstanding is $732,804.53 after making 36 monthly repayments.

b.

The monthly repayment is $107,103.02 and the outstanding is $732,804.53 after making 36 monthly repayments.

c.

The monthly repayment is $107,103.02 and the outstanding is $776,461.59 after making 36 monthly repayments.

d.

The monthly repayment is $7,899.18 and the outstanding is $776,461.59 after making 36 monthly repayments.

Kathys rich uncle promises her an allowance of $10,000 per month for 6 months, with the first allowance to be made 1 month from today. If the interest rate is 0.5% per month, what is the present value of the promised allowance?

a.

The present value of investment is $49,258.66.

b.

The present value of investment is $58,963.84.

c.

The present value of investment is $4,785.69.

d.

The present value of investment is $60,000.

The size, timing and risk of the cash flow from a potential investment are of equal importance and each must be taken into account when the investment us being evaluated.

True

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