1. 1. A loan of $10 000 is paid off with payment of $170.49 made at the end of each month for six years. The interest rate is 7% compounded monthly. Find the total interest paid over the six-year life of the loan.
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3. 2. For the loan in question 1, how much of the fifth payment goes to interest?

3. A house mortgage of $360 000 is amortized over 20 years by semi-monthly payments of $1222.62. What is the nominal annual rate of interest compounded semi-annually?

4. A loan of $40000 is paid off with installments of $2800 made at the end of each six months. The interest rate is 7% compounded semi-annually. The value of n is determined to be 20.1488. Find the size of the final payment.

5. A $1000, 7% coupon bond with semi-annual interest coupons redeemable at par in five years is bought to yield 6% compounded semi-annually. What is the purchase price?

6. A $15 000, 8% bond with semi-annual interest coupons redeemable at par in seven years is bought to yield 7% compounded semi-annually. Determine the amount of premium or discount.

7. A bond has a face value of $3500 and matures in 10 years. The interest rate is 7% payable semi-annually. Find the purchase price if the bond is sold to yield 8% compounded semi-annually.

Answer rating: 100% (QA)

To solve these questions well use various formulas and principles of finance Lets go through each question step by step 1 To find the total interest paid over the sixyear life of the loan we can use t... View the full answer