Question
Please show work for all questions if possible 1) You have borrowed $130,000 to buy a new motor home. Your loan is to be repaid
Please show work for all questions if possible
1) You have borrowed $130,000 to buy a new motor home. Your loan is to be repaid over 15 years at 8% compounded monthly. Calculate the total amount of interest you will pay over the life of the loan.
a | $ 47,451 |
b | $ 93,677 |
c | $126,226 |
d | $299,090 |
2) You have borrowed $130,000 to buy a new motor home. Your loan is to be repaid over 15 years at 8% compounded monthly How much total interest will you save over the life of the loan by paying an extra $200 per month loan?
a | $24,247 |
b | $41,872 |
c | $69,418 |
d | $81,763 |
3) You are considering an investment that will pay you $100 in Year 1, $500 in Year 2, $0 in Year 3 and $600 in Year 4. If you require a 12% return, what is the most you should pay for this investment today? (Round to nearest $)
a | $915 |
b | $869 |
c | $734 |
d | $698 |
4) The term maturity risk emphasizes the fact that
a | repayment is less assured as maturity lengthens |
b | shorter term bonds are worth more than longer term bonds |
c | bond prices change when interest rates change |
d | the prices of longer term bonds change more than the prices of shorter term bonds when interest rates change |
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