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You are considering a $495,000, 15 year, monthly amortizing price level adjusted mortgage (PLAM) at 3% real interest rate. The inflation in first 5 years is expected to be at 4%, in the next 5 years at 5%, and in the final five years at 2%.
post spreadsheet with all work/forumulas visible
a) Develop an annual amortization table for this contract as shown below.
b) Consider 1.25% commitment fees, 2 points and 4.5% closing cost on the loan. Calculate the APR. Use Excel functions for ALL calculations. For simplicity, consider only the annually aggregated cash flows when calculating the APR.
c) Draw an annual graph of how the monthly payment and mortgage balance change over the 15 years (as shown below).
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For each of the given changes, has the value of the country's current account balance increased, decreased, or stayed the same?
A $1,000 face value bond is currently quoted at 101.2. The bond pays semiannual payments of $28.50 each and matures in six years. What is the coupon rate?
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Create a replacement chain for Alternative A. Assume that the cost of replacing A will be $30,000 and that the replacement project will generate cash flows of $10,500 for years 5 through 8.
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A bond with a coupon rate of 8% makes semiannual coupon payments on January 15 and July 15 of each year. The ask price for the bond on January 30 is at 100:08. What is the Invoice Price of the bond? The coupon period has 182 days
Social, moral, environmental and ethical issues are part of the investment process and cannot be ignored by financial planners / managers. The burden of these costs fall unevenly on different firms. Some of these firms, especially the large companies..
On June 30, 2006, County Company issued 12% bonds with a par value of $826,900 due in 20 years. They were issued at 99 and were callable at 105 at any date after June 30, 2014. Prepare journal entries to record (1) the redemption of the old issue and..
Consider the following information regarding the performance of a money manager in a recent month. The table presents the actual return of each sector of the manager’s portfolio in column, the fraction of the portfolio allocated to each sector in col..
Why is it necessary to know about time value of money concepts? Why can’t you just make judgments about future cash flows based purely on the size of the cash flows? Define Future Value. Calculating present value) What's the present value of $10,000 ..
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