0.9 Mathematics of finance: homework  (Page 4/7)

Vijay's tuition at Stanford for the next year is $32,000. His parents have decided to pay the tuition by making nine monthly payments. If the interest rate is 9%, what is the monthly payment?

Glen borrowed $10,000 for his college education at 8% compounded quarterly. Three years later, after graduating and finding a job, he decided to start paying off his loan. If the loan is amortized over five years at 9%, find his monthly payment for the next five years.

Find the monthly payment.

Find the balance owed after 20 years.

Find the balance of the loan after 100 payments.

Find the monthly payment if the original loan were amortized over 15 years.

Mr. Patel wants to pay off his car loan. The monthly payment for his car is $365, and he has 16 payments left. If the loan was financed at 9%, how much does he owe?

An amount of $2000 is borrowed for a year at a rate of 18%. Make an amortization schedule showing the monthly payment, the monthly interest on the outstanding balance, the portion of the payment going toward reducing the debt, and the balance.

Fourteen months after Dan bought his new car he lost his job. His car was repossessed by his lender after he had made only 14 monthly payments of $376 each. If the loan was financed over a 4-year period at an interest rate of 10.3%, how much did the car cost the lender? In other words, how much did Dan still owe on the car?

You have a choice of either receiving $5,000 at the end of each year for the next 5 years or receiving $3000 per year for the next 10 years. If the current interest rate is 9%, which is better?

Mr. Smith is planning to retire in 25 years and would like to have $250,000 then. What monthly payment made at the end of each month to an account that pays 6.5% will achieve his objective?

Assume Mr. Smith has reached retirement and has $250,000 in an account which is earning 6.5%. He would now like to make equal monthly withdrawals for the next 15 years to completely deplete this account. Find the withdrawal payment.

A ten-year $1,000 bond pays $35 every six months. If the current interest rate is 8.2%, find the fair market value of the bond.

Hint: You must do the following.

1. Find the present value of $1000.

2. Find the present value of the $35 payments.

3. $\text{The fair market value of the bond}=a+b$

Find the fair market value of the ten-year $1,000 bond that pays $35 every six months, if the current interest rate has dropped to 6%.

Hint: Again, you must do the following.

1. Find the present value of $1000.

2. Find the present value of the $35 payments.

3. $\text{The fair market value of the bond}=a+b$