You have just taken out a 30 year, $120,000 mortgage on your new home. This mortgage is to be repaid in 360 equal monthly installments. If the stated (nominal)annual interest rate is 10.01percent, what is the amount of the INTEREST portion of the FIRST monthly installment?

 

2.  You are offered the opportunity to buy a note for $10,000. The note is certain to pay $2000 at the end of each of the next 15 years. If you buy the note, what rate of interest will you receive on this investment (to nearest %)

3. You are offered the opportunity to buy a note for $10,000. The note is certain to pay $2000 at the end of each of the next 15 years. If you buy the note, what rate of interest will you receive on this investment (to nearest %)

4. What is the PV of a 13-year annuity due (payments at beginning of period, aka annuity in advance) of $681 if the required return is 10.3%.

5. Williams Inc. is expected to pay a $6 dividend next year and that dividend is expected to grow at 3.6% every year thereafter (indefinitely, i.e. forever). If the discount rate is 10.0%, what would be the present value of the expected dividend stream (aka the expected price of the firm's stock)?

6. What is the EAR for a 15.5% APR with continuous compounding?

7. What is the EAR for a 15.5% APR with continuous compounding? 

8. Your salary next year is expected to be $40,000. Assume you expect your salary to grow at a steady rate of 4% per year for another 25 years. If the appropriate cost of capital (aka discount rate) is 10.6%, what is the PV today of your future salary cash flow stream? For simplicity, assume the salary amounts are at the end of each of the next 25 years. 

9.Next year you will begin receiving $163 per year in perpetuity from a family trust fund (first payment is exactly 1 year from today). You have decided to discount these cash flows at a constant interest rate of 5.8%. 

What is the present value today of these future cash flows?

10 . Next year you will begin receiving $163 per year in perpetuity from a family trust fund (first payment is exactly 1 year from today). You have decided to discount these cash flows at a constant interest rate of 5.8%. 

What is the present value today of these future cash flows?