Today is your 25 birthday (Again). You're planning to work and save money for the next...

 

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Today is your 25 birthday (Again). You're planning to work and save money for the next s years in order to start an MBA. The period of MBA will 2 years and you anticipate that you' need 1800s per month (beginning of month) during that period. You decide to save 4005 per month (beginning of month) today. You also have 4000s saving that you invest today as a deposit in a bank. If the interest rate is 7% (effective-annual) for the next 5 years and 9% (compound semi- annually) during your MBA, will you have enough money on your 30" birthday to go back to school? You just decided to purchase a chalet in the country for your vacation. The financial institution offers you a mortgage of 90 0005 over 25 years at 10%. The rate is fixed for 5 years and will be re-negotiated at the end of 5th year. a) Calculate your monthly payments for the next 5 years. b) At the end of 5th year, the interest rate is 12%. Calculate your new monthly payments. c) At the end of 5 year. you decide to extend your mortgage by 10 years (30 years instead of the remaining 20 years). Calculate your monthly payments. Complete the following table: Coupon rate 8% BOND A B C 10% Date of purchase 02/20/02 02/20/02 02/20/02 Maturity 02/20/16 02/20/14 08/20/13 Price 800.$ 890$ Yield 10.5% 12.5% The company ABC Inc. just paid 2.25$ in dividend per share. The analysts predict that the dividend will grow by 20% for the next 2 years. They also anticipate that ABC will not pay any dividend for 3rd and 4th years. The dividend will be 45 at 5th year and it will grow at 8% afterwards. a) If the required return on this company is 16%, calculate the price of these shares today. b) Calculate the price in 2 and 3 years. Today is your 25 birthday (Again). You're planning to work and save money for the next s years in order to start an MBA. The period of MBA will 2 years and you anticipate that you' need 1800s per month (beginning of month) during that period. You decide to save 4005 per month (beginning of month) today. You also have 4000s saving that you invest today as a deposit in a bank. If the interest rate is 7% (effective-annual) for the next 5 years and 9% (compound semi- annually) during your MBA, will you have enough money on your 30" birthday to go back to school? You just decided to purchase a chalet in the country for your vacation. The financial institution offers you a mortgage of 90 0005 over 25 years at 10%. The rate is fixed for 5 years and will be re-negotiated at the end of 5th year. a) Calculate your monthly payments for the next 5 years. b) At the end of 5th year, the interest rate is 12%. Calculate your new monthly payments. c) At the end of 5 year. you decide to extend your mortgage by 10 years (30 years instead of the remaining 20 years). Calculate your monthly payments. Complete the following table: Coupon rate 8% BOND A B C 10% Date of purchase 02/20/02 02/20/02 02/20/02 Maturity 02/20/16 02/20/14 08/20/13 Price 800.$ 890$ Yield 10.5% 12.5% The company ABC Inc. just paid 2.25$ in dividend per share. The analysts predict that the dividend will grow by 20% for the next 2 years. They also anticipate that ABC will not pay any dividend for 3rd and 4th years. The dividend will be 45 at 5th year and it will grow at 8% afterwards. a) If the required return on this company is 16%, calculate the price of these shares today. b) Calculate the price in 2 and 3 years.

Answer rating: 100% (QA)

SOLUTION a Monthly payments for first 5 years of mortgage at 10 interest Principal 9... View the full answer