H.W Assignment Example | Topics and Well Written Essays - 250 words - 4

H.W - Assignment Example If the appropriate discount rate is 7% annually, what is present value of the girl’s fortune? Suppose you are going to buy a car. The cost of car is $20,000. You have $8,000 for down payment. You can borrow the balance of $12,000 from dealership’s finance company at 2% APR, with monthly payment for 36 months or you can borrow from a bank with 8% APR monthly payment for 3 years, and receive a $2,000 rebate on the purchase price. Assume that if you take the rebate, you will apply it toward the purchase. Which alternative is better deal? You are preparing a vacation to Europe in the future. You plan to save $400 a month beginning today, and estimate you earn 0.5% per month on your savings. Your goal is to save $6,000. How long it take to save this amount? Bank of Land has student loan program starting today but requires no payments for 4 years. However, during this interest deferred period the loan accumulated interest at 6% rate, compounded quarterly. The bank amortizes the loan over ten year period, requiring quarterly payments and continuing charge 6% annual interest rate, compounded quarterly. What will be the quarterly payment will be on today’s loan of $30,000? Green Co. just paid dividend of $1 per share. The company predicts that the dividend will increase 5% for next 5 years and 3% thereafter forever. If your required rate of return is 8%, what price you should pay for the