Solve these problems on a separate sheet of paper, showing your work as modeled in class Wiggler (not his real name) bought a new bass boat for $23,000 He made a $5,000 down payment and financed the remainder at 14 5 for two years with monthly payments (a) Prepare a loan amortization schedule for the first three payment periods (b) How much interest will Wiggler pay, assuming he pays the loan off according to schedule (c) How much will he owe immediately after making the tenth payment Mark is considering an investment that will pay $15,000 per year for seven years, plus $145,000 at the end of the seventh year The investment costs $120,000 Given a RRR of 13 , evaluate this investment by both the PV and IRR approaches Clint wants to retire in 30 years Hes already saved $42,000 for retirement, and plans to contribute $4,000 per quarter into an investment account that he expects to earn 9 annually Upon retirement, he wants to withdraw $17,000 per month in annuity form for 25 years Will he be able to accomplish his retirement goals There are several ways to approach this problem, but lets assume you choose to solve for the maximum amount he can withdraw each month during retirement , and compare that amount to the $10,000 desired withdrawal Show work and explain A business venture is expected to require a $25,000 outlay at its inception, then to provide positive cash flows as shown below Given a RRR of 16 , evaluate this investment by both the NPV and IRR methods, and write an appropriate recommendation for each Year 1 2 3 4 5 Incremental CFAT $6,500 $17,000 $18,600 $5,500 $22,000 A bond issued by Fortis Corp will pay the owner $50 every six months for 12 years, plus $1,000 at the end of 12 years If the appropriate RRR for this bond is 9 , what is it worth Davey bought a consol , a form of perpetual bond issued by the government of the United Kingdom The bond promises to pay 65 annually forever Lets say you determine the RRR to be 4 25 what is it worth To take it further, lets say that this consol is selling for 1,430 plus a 25 commission Whats your investment recommendation

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Solve these problems on a separate sheet of paper, showing your work as modeled in class.

Wiggler (not his real name) bought a new bass boat for $23,000. He made a $5,000 down payment and financed the remainder at 14.5% for two years with monthly payments.

(a) Prepare a loan amortization schedule for the first three payment periods.

(b) How much interest will Wiggler pay, assuming he pays the loan off according to schedule?

Mark is considering an investment that will pay $15,000 per year for seven years, plus $145,000 at the end of the seventh year. The investment costs $120,000. Given a RRR of 13%, evaluate this investment by both the PV and IRR approaches.

Clint wants to retire in 30 years. Hes already saved $42,000 for retirement, and plans to contribute $4,000 per quarter into an investment account that he expects to earn 9% annually. Upon retirement, he wants to withdraw $17,000 per month in annuity form for 25 years. Will he be able to accomplish his retirement goals? There are several ways to approach this problem, but lets assume you choose to solve for the maximum amount he can withdraw each month during retirement, and compare that amount to the $10,000 desired withdrawal. Show work and explain.

A business venture is expected to require a $25,000 outlay at its inception, then to provide positive cash flows as shown below. Given a RRR of 16%, evaluate this investment by both the NPV and IRR methods, and write an appropriate recommendation for each.

Year 1 2 3 4 5

Incremental CFAT $6,500 $17,000 $18,600 $5,500 $22,000

A bond issued by Fortis Corp. will pay the owner $50 every six months for 12 years, plus $1,000 at the end of 12 years. If the appropriate RRR for this bond is 9%, what is it worth?

Davey bought a consol, a form of perpetual bond issued by the government of the United Kingdom. The bond promises to pay 65 annually forever. Lets say you determine the RRR to be 4.25%; what is it worth? To take it further, lets say that this consol is selling for 1,430 plus a 25 commission. Whats your investment recommendation