David borrowed R911 012,00 to refurbish his holiday home. The loan requires monthly repayments over 12 years. When he borrowed the money, the interest rate was 12,4% per annum, compounded monthly, but five years later the bank increased the annual interest rate to 13,9%, in line with market rates. After five years, the present value of the loan is R682 081,77. With the new interest rate, his monthly payments (rounded to the nearest rand) will increase by: A. R558 B. R3 649 c. R12 745 D. R7 705

David borrowed R911 012,00 to refurbish his holiday home. The loan requires monthly repayments over 12 years. When he borrowed the money, the interest rate was 12,4% per annum, compounded monthly, but five years later the bank increased the annual interest rate to 13,9%, in line with market rates. After five years, the present value of the loan is R682 081,77. With the new interest rate, his monthly payments (rounded to the nearest rand) will increase by: A. R558 B. R3 649 c. R12 745 D. R7 705

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Mr. Sy borrowed money from a bank with an interest of 6% compounded monthly for 10 years. His monthly amortization is P20, 000. 6. What is the total interest rate per conversion period? C. 0.0075 A. 0.005 B. 0.006 D. 0.06 7. What is the total number of period of time to fully paid the loan? А. 100 B. 120 C. 160 D. P 240 8. After 80th payment, what is the total number of payments remain? В. 30 C. 40 9. What is the total number of payment of Mr. Sy after he paid the 10-year mortgage? C. P2, 148,919.34 D. P2, 400, 000 A. 20 D. 120 A. P1, 899, 600.14 B. P2, 026,802.24 10. How much is his outstanding balance after the 80th payment? C. P704, 564. 56 D. P723, 444. 56 A. P690, 444. 56 В. Р683, 134. 56
1. Warren borrowed RM4,040 from John at an interest rate of 4.4% compounded weekly. The loan is to be repaid by four payments. The first payment, RM1,010, is due two years after the date of the loan. The second and third payments are due three and five years respectively, after the initial loan. The last payment is due six years after the first payment where he paid RM404. Calculate the amounts of the second and third payments if the second payment is to be thrice the size of the third payment.
A man borrowed an amount of P150,600 to bank that offers an interest rate of 5.36% compounded continuously and has a maturity date of 6 years. He plans to pay the loan at an amount of P15,800 at the end of 2 years, and P10,450 at the end of 3 years. 1. How much must he pay at the end of 6 years? 2. If instead of paying an amount at the end of 2nd and 3rd year, he decided to pay by a single lump sum all the amount including the future liabilities at the end of 5 years, how much is the lump sum?
Ruth borrowed P200,000.00 with 20% simple interest rate from ABC bank. At the time the money was borrowed, the interest was deducted. After a year, Ruth has to pay P200,000.00. What is the actual interest rate? Assessment 1) Compute the simple interest of P125,000.00 at 4% for 18 months. 2) Compute the future value of P84,000.00 at 8 ½ % for 5 years. 3) Find the simple interest rate of an initial amount of P76,000.00 for 3 years with an interest of P5,700.00. 4) If you are to lend money with simple interest, one with P146,050.00 at 3.7% for 8 years and the other one with P164,400.00 at 2.8% for 9 years, which one will earn more? 5) How long will it take P6,000.00 to double at 10% simple interest?
A man borrowed an amount of P150,600 to bank that offers an interest rate of 5.36% compounded continuously and has a maturity date of 6 years. He plans to pay the loan at an amount of P15,800 at the end of 2 years, and P10,450 at the end of 3 years. If instead of paying an amount at the end of 2nd and 3rd year, he decided to pay by a single lump sum all the amount including the future liabilities at the end of 5 years, how much is the lump sum?
Thulisile bought a house and managed to secure a home loan for R790 000 with monthly payments of R9 680,70 at a fixed interest rate of 13,75% per year, compounded monthly, over a period of 20 years. If an average yearly inflation rate of 9,2% is expected, then the real cost of the loan (the difference between the total value of the loan and the actual principal borrowed) is [1] R201 642. [2] R270 749. [3] R588 358. [4] R1 060 749. [5] R87 126
Asa Khumalo purchased a vehicle to the value of R224987 today and expects to make repayments for the next 7 years. The bank charges Asa at 12% pa compounded monthly. Asa believes that between months 18 and 21 she will not be able to make payments. What will Asa's new payments be over the remaining term.
A businessman borrowed P300,000 with interest at the rate of 6% compounded annually. He agrees to discharge his obligation by paying a series of 6 equal annual payments, the first being due at the end of 5th year. a. What is the value of the annual payments? b. What is the sum of all his payments? c. What is the actual interest that he paid?
A person borrowed a loan and pledged to repay it and its interest using the amortization method, out of the loan principal with interest in four installments. Each installment is paid at the end of every six months. If you know that the interest rate is 5% annually and that the first installment of the principal amount and its interest is 840 dinars, so the value of the loan amount is??A - 3200 dinarsB - 3600 dinarsc 4000 dinarsD - 4500 dinars.
James received a 15 year loan of $230,000 to purchase a house. The interest rate on the loan was 2.10% compounded semi- annually. a. What is the size of the monthly loan payment? b. What is the balance of the loan at the end of year 2? Round to the nearest cent c. By how much will the amortization period shorten if James makes an extra payment of $30,000 at the end of year 2?
Mr. Mamun borrowed Tk. 115,000 at a 12.5% annual rate of interest to be repaid over 5 years. The loan is amortized into five equal end-of-year payments. The loan has processing fees of 1.25%. Requirements: Calculate the annual end-of-year loan payment. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the five loan payments. Explain why interest decreased gradually in this process?
Johnson takes a loan of RM600,000 from a bank. The bank charges an interest rate of 6.6%per annum compounded monthly. He agrees to repay his loan by making two equal payments at the end of the third year and the fifth year. Question Find the repayment amount.

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