Question
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
False
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