A house cost $300,000. The buyer pays $150,000 cash and agrees to discharge the balance by...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A house cost $300,000. The buyer pays $150,000 cash and agrees to discharge the balance by payments of $3,500 at the end of each month. If money is worth 7% compounded monthly, find: a) number of-regular payments; b) date when the fund, first exceed $300,000; c) final payment on the day of the last regular payment; d) final payment one period after the last regular payment; e) the outstanding principal after the 10th period. A debt of $250,000 is to be repaid after 5 years. If the interest is charged at 5% compounded semi-annually, a sinking fund is created at a rate of 6% compounded semi-annually. Find: a) the semi-annual cost by the sinking fund method; b) the semi-annual cost by amortization; c) Did the borrower made the right decision in setting up a sinking fund? Justify your answer. A house cost $300,000. The buyer pays $150,000 cash and agrees to discharge the balance by payments of $3,500 at the end of each month. If money is worth 7% compounded monthly, find: a) number of-regular payments; b) date when the fund, first exceed $300,000; c) final payment on the day of the last regular payment; d) final payment one period after the last regular payment; e) the outstanding principal after the 10th period. A debt of $250,000 is to be repaid after 5 years. If the interest is charged at 5% compounded semi-annually, a sinking fund is created at a rate of 6% compounded semi-annually. Find: a) the semi-annual cost by the sinking fund method; b) the semi-annual cost by amortization; c) Did the borrower made the right decision in setting up a sinking fund? Justify your answer.
Expert Answer:
Answer rating: 100% (QA)
Answer Griven amount of loan cost of the house P 300... View the full answer
Related Book For
Mathematical Applications for the Management Life and Social Sciences
ISBN: 978-1305108042
11th edition
Authors: Ronald J. Harshbarger, James J. Reynolds
Posted Date:
Students also viewed these finance questions
-
a loan must be repaid in 5 years and a 36% annual financing interest payable monthly. if the installments are monthly and equal within each year, but, year after year, they decrease by 2%, find the...
-
The price of pizza is pz = 20 per unit. (a) Donna spends all of her income, 100 dollars, on pizza (z) and tacos (t). Donnas utility function is U(z, t) = z 0.9 t 0.1 . (a.1) Derive Donnas demand...
-
If money is worth 12%, would you prefer receiving $200,000 now or $30,000 each year for the next 10 years? 1. What is the value of each amount 10 years from now? 2. What is todays present value of...
-
A bartender employed in a licensed establishment over-serves a patron. As a result of the over-service, the patron physically assaults another patron by striking him with a beer bottle. Identify and...
-
On January 1, 2009, Moody Company leased a warehouse for $20,000 per year. The first annual payment is due December 31, 2009. The present value of the lease payments, which is also the fair value of...
-
Women diagnosed with breast cancer whose tumors have not spread may be faced with a decision between two surgical treatments mastectomy (removal of the breast) or lumpectomy ( only the tumor is...
-
Back to the model of section 8.3 as given in the book. Suppose that the fixed assets at cost follow the following step function: Incorporate this function into the model. (100%* Sales Fixed Assets at...
-
The stockholders equity section of Haley Corporation at December 31 is as follows. HALEY CORPORATION Balance Sheet (partial) Paid-in capital Preferred stock, cumulative, 10,000 shares authorized,...
-
Show all steps please, thank you Question 3 (6 points) A box hangs from two cables fastened to the ceiling at angles of 60 and 50 to the horizontal. The mass of the box is 20 kg. Determine the...
-
During December 2010, Amin Corp. manufactured products requiring 8,000 standard labor hours. The following variance and actual information is available: Labor rate variance ........ $4,500 U Labor...
-
Olive runs an organic garden that sells fresh vegetables to restaurants as well as donates fresh vegetables to local food banks and homeless shelters. Fred owns a large building beside the organic...
-
What role do dynamic market forces play in precipitating the decline of established organizations within technologically advanced sectors ?
-
Discuss the roles of zakat as an Islamic social fund in mitigating the effect of the Covid-19 pandemic on the people and the entire community. include at least 4 (FOUR) examples that have been taken...
-
For a standard normal distribution, find: P(z c) 0.2725 Find c rounded to two decimal places.
-
Use part one of the fundamental theorem of calculus to find the derivative of the function. h'(x) = h(x) = 9 In(t) dt
-
Walks them through their current year tax return. Detail which expenses they incurred that were nondeductible for tax purposes and explain why. The Smiths have always itemized deductions instead of...
-
Explain the difference between the traditional production system and JIT/Lean in terms of placement of production control. - Explain how a JIT/Lean process knows when and how much to produce. - Disc
-
Using Gauss-Jordan elimination, invert this matrix ONLY 0 0 0 0 1
-
A product with a large advertising budget has its sales S (in millions of dollars) given by where t is the number of months the product has been on the market. (a) Find the rate of change of sales at...
-
Rising health care costs are a growing concern for everyone in the United States. With U.S. Centers for Medicare and Medicaid Services data from 2006 and projected to 2021, U.S. per capita health...
-
A recently released film has its weekly revenue given by R (t) = 50t / t2 + 36, t 0 where R(t) is in millions of dollars and t is in weeks. (a) Graph R(t). (b) When will revenue be maximized? (c)...
-
Special order decision and considerations (Learning Objective 2) Maui Jane Sunglasses sell for about $150 per pair. Suppose the company incurs the following average costs per pair: Maui Jane has...
-
Pricing decisions given two scenarios (Learning Objective 3) Bennett Builders builds 1,500-square-foot starter tract homes in the fast-growing suburbs of Atlanta. Land and labor are cheap, and...
-
Decide whether to drop a product line (Learning Objective 4) Top managers of Video Avenue are alarmed by their operating losses. They are consid ering dropping the VCR-tape product line. Company...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App