Question

PLEASE SHOW HOW TO SOLVE USING FINANCIAL CALCULATOR.

20) Suppose Oppenheimer Bank is offering a 30-year mortgage with an EAR of 6.80%. If you plan to borrow $150,000, what will your monthly payment be?

24) What is the present value (PV) of an investment today that pays $10,000 every year for four years, starting one year from today? Assume the interest rate is 7% APR, compounded quarterly.

25) You just deposited $2,500 in a bank account that pays a 12% APR, compounded quarterly. If you also add another $5,000 to the account one year from now and another $7,500 to the account two years from now, how much will be in the account three years from now?

Answer 1

Q20.
Amount borrowed:					150000
Annuall rate of interest = 6.80%
Monthly rate of interesr = 6.8/12 = 0.5667%
Divide: Annuity PVF at 0.5667% for 360 periods					153.3856
Monthle Payment to be made					977.93
Q24.
Annual Interest = 7%
Quarterly rate = 7/4 = 1.75%
Efective annual rate = (1.0175)^4 - 1 = 7.19%
Annual deposits			10000
Multiply: Annuity PVF at 7.19% for 4yrs			3.37273
Present value of amounts			33727.3
Q25.
Annual rate = 12%
qaurterlt rate = 12/4 = 3%
Effective rate = (1.03)^4 -1 = 12.55%
Year	Deposits	FVF at 12.55%		Future value
0	2500	1.425727		3564.319
1	5000	1.26675		6333.751
2	7500	1.1255		8441.25
3	0	1		0
		Amount at end of 3yr		18339