help in homework

New User?

Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive /   1) You have just purchased a new warehouse

  1) You have just purchased a new warehouse

Finance

 

1)

You have just purchased a new warehouse. To finance the purchase, you've arranged for a 30-year mortgage loan for 80 percent of the $2,300,000 purchase price. The monthly payment on this loan will be $15,000.
a. What is the APR on this loan?
   
   
b. What is the EAR?

2)

What is the future value of $300 in 21 years assuming an interest rate of 10 percent compounded semiannually?

Multiple Choice

  • $2,328.48

  • $2,212.05

  • $2,220.07

  • $408.66

  • $362.07

3)

You deposit $1,100 at the end of each year into an account paying 10.1 percent interest.
a. How much money will you have in the account in 16 years?
   
   
b. How much will you have if you make deposits for 32 years?
   
   

 4)Bond X is noncallable and has 20 years to maturity, a 9% annual coupon, and a $1,000 par value. Your required return on Bond X is 12%; if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5 years, the yield to maturity on a 15-year bond with similar risk will be 8%. How much should you be willing to pay for Bond X today? (Hint: You will need to know how much the bond will be worth at the end of 5 years.) Do not round intermediate calculations. Round your answer to the nearest cent.

5) Last year Janet purchased a $1,000 face value corporate bond with an 10% annual coupon rate and a 20-year maturity. At the time of the purchase, it had an expected yield to maturity of 13.08%. If Janet sold the bond today for $1,051.15, what rate of return would she have earned for the past year? Do not round intermediate calculations. Round your answer to two decimal places.

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

1)please see the attached file.

2)

Future Value = Present value * [1 + (R / N)]T * N

N = number of compounding periods = 2

T = Time in years = 21

R = Interest rate = 10%

Present value = $300

Future value = $300 * [1 + (0.10/2)]21 * 2

Future value = $300 * [1 + 0.05]42

Future value = $300 * [1.05]42

Future value = $300 * 7.76158755456

Future value = $2,328.48

3)

Deposits (PMT) = $ 1100 and rate of interest (RATE) = 10.1%

a) Tenure = 16 years;

Using Excel formula, for Future Value (FV) = FV(RATE,NPER,-PMT,PV,0) = FV(10.1%,16,-1100,,0) = $ 39886.07

Answer: $ 39886.07

b) Tenure = 32 years;

Using Excel formula, for Future Value (FV) = FV(RATE,NPER,-PMT,PV,0) = FV(10.1%,32,-1100,,0) = $ 225845.57

Answer: $ 225845.57

4)

Given the following data,

Face Value = $1,000

Coupon rate = 9%

Required return = 12%

Years to maturity = 20

Interest rate at the end of the fifth year = 8%

Step 1: Calculating the price of the bond with 15 years of maturity:

Please use this google drive link to download the answer file.       

https://drive.google.com/file/d/1TVbo1DG_iUImU_IYxv5mbdDAddlN7Yxv/view?usp=sharing

Note: If you have any trouble in viewing/downloading the answer from the given link, please use this below guide to understand the whole process. 

https://helpinhomework.org/blog/how-to-obtain-answer-through-google-drive-link 

5)

Given Information

FV $1000
INTEREST $100 ( 10% OF 1000)
YTM RATE 13.08%
YTM 20 Years
COMPOUNDING Annually

Rate of return = Current yield    + Capital Gain Yield

= Annual interest / bond price + Current price / Price of the bond last year

Price of the bond = int [ 1 - ( 1 + r / 100) -n ] / r + FV / ( 1 + r /100) n

= 100 [ 1 - ( 1 + .1308) -20] / 0.1308 + 1000 / ( 1 + 0.1308)20

= 100 [ 1 - 0.0855] / 0.1308 + 1000 / 11.68

= 699.15 + 85.6

= $ 784.75

Current yield = Annual interest / bond price

= 100 / 784.75

= 12.74%

Capital Gain Yield = Current price / Price of the bond last year - 1

= 1051.15 / 784.75 - 1  

= 1.339 - 1

= 0.339 %

Total Return = 12.74% + 0.339%

= 13.08%

Download Attached File

Sitejabber (5.0)

BBC (5.0)

Trustpilot (4.9)

Google (5.0)