The Howe family recently bought a house. The house has a 15-year, $249,865.00 mortgage with monthly payments and a nominal interest rate of 3.8 percent. What is the total dollar amount of principal the family will pay during the first 4 years of their mortgage? (Assume that all payments are made at the end of the month.)
Drongo Corporation’s 4-year bonds currently yield 4.8 percen…
Drongo Corporation’s 4-year bonds currently yield 4.8 percent and have an inflation premium of 2.1%. The real risk-free rate of interest, r*, is 2.1 percent and is assumed to be constant. The maturity risk premium (MRP) is estimated to be 0.1%(t – 1), where t is equal to the time to maturity. The default risk and liquidity premiums for this company’s bonds total 0.3 percent and are believed to be the same for all bonds issued by this company. If the average inflation rate is expected to be 5.6 percent for years 5, 6, and 7, what is the yield on a 6-year bond for Drongo Corporation?
What is the present value of a 18-year ordinary annuity with…
What is the present value of a 18-year ordinary annuity with annual payments of $1,538, evaluated at a 11.6 percent interest rate?
A bank recently loaned you $14,440.00 to buy a car. The loa…
A bank recently loaned you $14,440.00 to buy a car. The loan is for 4 years and is fully amortized. The nominal rate on the loan is 11 percent, and payments are made at the end of each month. What will be the remaining balance on the loan after you make payment number 35?
The primary operating goal of the firm should be to
The primary operating goal of the firm should be to
If $4,576 is placed in an account that earns a nominal 2.6 p…
If $4,576 is placed in an account that earns a nominal 2.6 percent, compounded daily, what will it be worth in 18 years?
In 1962 the average tuition for one year at an Ivy League sc…
In 1962 the average tuition for one year at an Ivy League school was $1,509. 24 years later, in 1986, the average cost was $16,519. What was the growth rate in tuition over the 24-year period?
Assume that the real risk-free rate is constant. Also assume…
Assume that the real risk-free rate is constant. Also assume that inflation is expected to increase in the future, and that the maturity risk premium is positive and increasing in maturity. Given these conditions, which of the following must be true?
Which of the following is not a disadvantage of a sole propr…
Which of the following is not a disadvantage of a sole proprietorship?
What is the future value of a 3-year ordinary annuity with a…
What is the future value of a 3-year ordinary annuity with annual payments of $2,824, evaluated at a 3.5 percent interest rate?