Finance: You recently purchased a car and took out a four-year

 Finance: You recently purchased a car and took out a four-year

Subject: Business    / Finance
Question
1. You recently purchased a car and took out a four-year loan for $20,000. The loan calls for equal
monthly payments and the rate of 0.5% per month. How much interest is paid in the 3 rd month?
2. You will receive $20,000 in two years at graduation. You plan on investing it for the following 8
years and hope to double that amount. What rate per month must you earn?
3. You will make weekly payments of $1,000 into an account that pays 9% compounded weekly.
How many payments will you have made when your account balance reaches $100,00?
4. Your firm is issuing 14-year zero coupon bonds with a 5% yield and pays semiannually. The goal is
to raise $3,000,000. What is your company’s total repayment 14 years from now?
5. Your firm is issuing 14-year coupon bonds with a 5% yield , 6% coupon, and pays annually. The
goal is to raise $3,000,000. What is your companys total repayment 14 years from now?
6. The price of the bond is $1130.35. the bonds make annual payments, has a YTM of 5.6%.
Calculate the coupon rate. The bonds are 7 years from maturity.
7. You currently have $55,000 in your retirement account. You will make quarterly deposits of
$2,750 into your account for the next 20 years. If the account earns 8% compounded quarterly,
calculate how much you have in your account when you retire in 20 years.
8. Your firm issued 20-year zero coupon bonds one year ago. The YTM is 5.5%. Calculate the
current bond price if the bonds make annual payments.
9. You owe $2,500 on your credit card. If they charge 16.44% compounded monthly and you want
to pay off your debt in 3 years, how much must you pay each month?
10. You are planning your retirement in 30 years. You plan to have $2,500,000 in your retirement at
that time and the account will earn 10% compounded quarterly. If you will withdraw an equal
amount each year, for the 10years after retirement, how much can you withdraw? Assume you
will have nothing left after 10 years.