Question
Please show work! A) A bank is offering 12% compounded quarterly. If you put $100 in an account, how much will you have at the
Please show work!
A) A bank is offering 12% compounded quarterly. If you put $100 in an account, how much will you have at the end of one year? Whats the EAR?
B) Using pure discount. A borrower can afford to re-pay $25,000 in 5 years. We want to earn 12% per year. How much would we loan him?
C) Using balloon payment. What is the loan payment of a fully amortizing loan of $5,000 at 9% for 5 years?
D) A real estate investor borrowed $500,000 for a development project at 7%. The payments are calculated using a 20 year amortization. A balloon payment of the entire balance is due in 5 years. What is the monthly payment? What is the balloon payment in year 5?
F) Which of the following interest rates would result in the most accurate answer:
Annual Percentage Rate (APR), Nominal Rate, Stated Rate, or Effective Annual Rate.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started