Question $3(16$ marks$)$

a$)$ You purchased an expensive sports car for $N$$$99980$ exactly $6$ months ago. It was financed through the bank at a quoted or nominal interest rate of $12\%$ per annum, over $60$ months, with payments being monthly in arrears.

What is the balance you owe to the bank today $($having just paid your sixth installment of $N$$$2224)?(4$ marks$)$

b$)$ Nancy has an equity investment in Ace Manufacturing Ltd$.$ The company recently paid a dividend. The company's latest earnings per share was $225$ cents and the dividend yield quoted in the press yesterday was $4\%.$ In terms of the company's dividend policy, dividend cover $($i$.$e$.$ EPS$/$DPS$)$ is maintained at $3$ times.

Calculate Ace manufacturing's price$/$earnings ratio as per the newspaper. $(4$ marks$)$

c$)$ An investment in a government bond with a face value of $N$$$1000$ earns interest on the face value at $10\%$ per annum. Interest is payable every six months. The bond will be redeemed in exactly $9$ years time. The yield to maturity is $8\%$ per annum.

What is the current market value of the bond? $4$ marks

d$)$ Elzo Ltd just declared an ordinary dividend of $N$$$2\mathrm{.}00$ per share. Dividend growth is expected to be $8\%$ per annum in the future. The required rate of return on Elzo's shares is $15\%.$

What is the current value of an Elzo share? $(4$ marks$)$