What relationship exists between the calculation of the present value of an annuity and amortization of a loan? How can you find the amount of interest paid each year under an amortized loan?
Answer to relevant QuestionsHow can you find the interest or growth rate for: (a) A lump sum amount, (b) An annuity, and (c) A mixed stream? How would the future value of a mixed stream of cash flows be calculated, given the cash flows and applicable interest rate? What is the relationship between the variables in a loan amortization and the total interest cost? Consider the variables of interest rates, amount borrowed, down payment, prepayment, and term of loan in answering this ...Dixon Shuttleworth has been offered the choice among three retirement-planning investments. The first investment offers a 5 percent return for the first 5 years, a 10 percent return for the next 5 years, and a 20 percent ...Suppose the Treasury issues two 5- year bonds. One is an ordinary bond that offers a fixed nominal coupon rate of 4 percent. The other bond is an inflation- indexed bond (or TIPS). When the TIPS bond is issued, will it have ...
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