Question

Your friend wants to borrow money from you. He proposes to repay
his debt in 5 monthly installments of $200, starting from month 4
(i.e., the first payment will occur at the end of month 4). If the
monthly interest rate on your savings account is 1%, how much would
you lend your friend at most? Round your result to the nearest
cent, and do not use a $ sign (i.e., if the result is $1012.4671,
enter it as 1012.47).

Answer #1

Amont lend to friend at most will be present value of repayment made by friend.

Amount repaid per month = 200

Repayment starts from end of month 4

Number of payments (n) =5

monthly interest rate (i)=1%

Present value of payment at month 3 = Annuity at end *(1-(1/(1+i)^n))/i

=200*(1-(1/(1+1%)^5))/1%

=$970.69

This is value at month 3 end (future value) = $970.69

month gap (n) =3

Present value of single future value today = future value/(1+i)^n

=970.69/(1+1%)^3

=$942.14

So we can land our friend at most $942.14

Your friend wants to borrow money from you. He proposes to repay
his debt in 4 monthly installments of $100, starting this month
(i.e., the first payment will occur at the end of month 1). If the
monthly interest rate on your savings account is 1.5%, how much
would you lend your friend at most? Round your result to the
nearest cent, and do not use a $ sign (i.e., if the result is
$1012.4671, enter it as 1012.47)...

Q4 Your friend wants to borrow some money from you but he can
only afford to pay a monthly installment of $250 at the end of each
of the next 36 months. If the interest rate is 12% APR (i.E.
compounded monthly), what is the most you can lend him (to the
nearest $100) if the loan is to fully repaid at the end of month
36.
Select one:
a. $6,500
b. $7,500
c. $8,000
d. $9,000
e. None of...

A friend wants to borrow money from you. He states that he will
pay you $3,600 every 6 months for 11 years with the first payment
exactly 4 years and six months from today. The interest rate is an
APR of 5.9 percent with semiannual compounding. What is the value
of the payments today?

A friend asks to borrow $49 from you and in return will pay you
$52 in one year. If your bank is offering a. 6.1% interest rate on
deposits and loans: a. How much would you have in one year if you
deposited the $49 instead? b. How much money could you borrow
today if you pay the bank $52 in one year? c. Should you loan the
money to your friend or deposit it in the bank?
a. How...

A friend wants to borrow money from you. He states that he will
pay you $3,800 every 6 months for 13 years with the first payment
exactly 6 years and six months from today. The interest rate is 6.1
percent compounded semiannually. What is the value of the payments
today?

A friend wants to borrow money from you. He states that he will
pay you $3,400 every 6 months for 9 years with the first payment
exactly 7 years and six months from today. The interest rate is 5.7
percent compounded semiannually. What is the value of the payments
today?
$32,128.58
$33,021.49
$35,079.17
$31,070.77
$31,956.28

Glenn wants to borrow money from Joe and promises repay $10,000
in 2 years. What is the most Joe would be willing to lend if his
required return is 20 percent?

Jed wants to borrow
$1,000
from you. He is proposing to repay you with three annual
payments of
$347.03
starting one year from
now.
In addition, he will make a final lump-sum payment of
$120
three years from
today.
What rate of return are you earning on the loan?
What rate of return are you earning on the loan?

Suppose you lend ?$46500 to a friend at an APR of 10.00?%. Your
friend will pay you back beginning next month with 48 monthly
installments. You can reinvest the payments you receive in your
money market account at an APR of 1.40?%, calculated monthly.?
a. How much will your friend pay you each? month?
b. How much will you have in your account at the end of
48 months? (to nearest? $)??
c. What is your effective annual return? (EAR),...

(Solving for r of an annuity) You lend a friend $30,000, which your
friend will repay in 5 equal annual end-of-year payments of $8,000,
with the first payment to be received 1 year from now. What rate
does your loan reciece?
The rate of return your loan will receive is ____%(round to
two decimal places)

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 5 minutes ago

asked 10 minutes ago

asked 11 minutes ago

asked 13 minutes ago

asked 15 minutes ago

asked 17 minutes ago

asked 24 minutes ago

asked 29 minutes ago

asked 37 minutes ago

asked 37 minutes ago

asked 39 minutes ago

asked 45 minutes ago