56000 per year for the first ten years. Ole expects to eam 8 per. cent per year on average from investments over the next fifty years. What must his minimum annual savings be from years 11 through 20 to meet his objectives? 19 One year ago you borrowed $10.000 at an annual interest rate of 12 percent (1 percent per month) to be repaid in thirty-six monthly installments of $332.14 each. You have made twelve pay- ments on the loan. a What is the current balance remaining on the loan? (Hint: What is the relationship between the present value of the re- maining payments to be made on the loan and its current balance?) b What will be the balance owed on the loan one year from now if all payments are made as scheduled? What is the dollar amount of interest to be paid on the loan in the coming year? (Hint: The answers to a and b are very useful in answering c.) Compute the annual interest rate or rate of return that you will cam on the following investments: A U.S. Treasury bill that has a current price of 5930 and will pay 51000 at maturity one year from now. (Ans.: 7.53 percent) A U.S. Treasury bill that has a current price of 5950 and will pay 51000 at maturity six months from now. (Ans.: 10.53 per. cent) C A U.S. Treasury note selling at its maturity value (51000), pay- ing 9 percent coupon interest per year, and maturing in five years. An acre of vacation property with a current price of 55000 that you expect to be able to sell for 56475 in three years. There are no other expenses or income from this property. A preferred stock with a current price of 590 paying 510.80 dividends per share per year forever. 21 Compute the annual interest rate for the following investments: A U.S. Treasury bill which matures in ninety-one days with a quoted price of 597.50 per 5100 maturity value. 5 A share of common stock purchased one year ago at a price of S42 per share and just sold for $48. No dividends were re- ceived. C. A share of common stock purchased one year ago for 521 and sold yesterday for 518 after receipt of a dividend check for si. A share of common stock purchased for 530 three years ago and just sold for 530. Dividends of 52.10 were received at the end of each of the three years of ownership. Benito Rubio borrowed 5000 bolivars (B) from his older brother in Caracas, Venezuela. Benito promised to repay the loan in two an- nual installments of B3000 each. What rate of interest is Benito paying his brother? (Approximate the answer to the nearest whole percentage by inspection of the tables.) 22 56000 per year for the first ten years. Ole expects to eam 8 per. cent per year on average from investments over the next fifty years. What must his minimum annual savings be from years 11 through 20 to meet his objectives? 19 One year ago you borrowed $10.000 at an annual interest rate of 12 percent (1 percent per month) to be repaid in thirty-six monthly installments of $332.14 each. You have made twelve pay- ments on the loan. a What is the current balance remaining on the loan? (Hint: What is the relationship between the present value of the re- maining payments to be made on the loan and its current balance?) b What will be the balance owed on the loan one year from now if all payments are made as scheduled? What is the dollar amount of interest to be paid on the loan in the coming year? (Hint: The answers to a and b are very useful in answering c.) Compute the annual interest rate or rate of return that you will cam on the following investments: A U.S. Treasury bill that has a current price of 5930 and will pay 51000 at maturity one year from now. (Ans.: 7.53 percent) A U.S. Treasury bill that has a current price of 5950 and will pay 51000 at maturity six months from now. (Ans.: 10.53 per. cent) C A U.S. Treasury note selling at its maturity value (51000), pay- ing 9 percent coupon interest per year, and maturing in five years. An acre of vacation property with a current price of 55000 that you expect to be able to sell for 56475 in three years. There are no other expenses or income from this property. A preferred stock with a current price of 590 paying 510.80 dividends per share per year forever. 21 Compute the annual interest rate for the following investments: A U.S. Treasury bill which matures in ninety-one days with a quoted price of 597.50 per 5100 maturity value. 5 A share of common stock purchased one year ago at a price of S42 per share and just sold for $48. No dividends were re- ceived. C. A share of common stock purchased one year ago for 521 and sold yesterday for 518 after receipt of a dividend check for si. A share of common stock purchased for 530 three years ago and just sold for 530. Dividends of 52.10 were received at the end of each of the three years of ownership. Benito Rubio borrowed 5000 bolivars (B) from his older brother in Caracas, Venezuela. Benito promised to repay the loan in two an- nual installments of B3000 each. What rate of interest is Benito paying his brother? (Approximate the answer to the nearest whole percentage by inspection of the tables.) 22