Question

Please Answer all question please don't answer just one question if you can't all. Answer all please.
6. Exxon Mobil has preferred shares with a yield of 5.14%. If the quarterly dividend is $1.92, what is the value of a share?
7. You have accumulated $1,145 in debt by buying things on Amazon during quarantine.  The minimum monthly payment is $22, If you make only the minimum payment, it will take you 94 months to pay it off. How much total interest will you pay?
8. You are buying a house and will take out a 30-year mortgage of $577,105. If the interest rate is 4.33% per year, what will be your monthly payment?
10. You will invest $209.86 per month. If your investment will grow to $17,955.73 in 5 years, how much total interest did you earn?
11. Annuity A and B are exactly the same except that annuity A has an interest rate of 4% and annuity B has an interest rate of 5%, which one has the higher present value?

Answer 1

6. Quarterly Rate =5.14%/4 =1.285%
Quarterly Dividend =1.92
Value of Share =Quarterly Dividend/Quarterly Rate =1.92/1.285% =149.42

7. PV of debt amount =1145
PMT or Monthly Payment =22
Number of Months =94
Total Interest you would pay =PMT*Number of Months-PV =22*94-1145 =923

8. PV of Mortgage Amount =577105
Number of Months =30*12 =360
Rate per month =4.33%/12
Monthly Payment=PV/(1-(1+r)^-n)/r) =577105/((1-(1+4.33%/12)^-360)/(4.33%/12)) =2866.10

10. PMT or Monthly Payment =209.96
Number of Months =5*12 =60
FV =17955.73
Total Interest =FV-PMT*Number of Months =17955.73-209.96*60 =5358.13

11. Higher the interest rate lower is the Present Value of Perpetuity. Hence Annuity A has the higher Present Value.