Reference no: EM131241684
PROBLEM 1 - Eric leased a new car. The deal calls for 36 beginning-of-month payments of $450, starting today. In addition, Eric has to include $1,000 with the final payment. The contract has an APR of 12% with monthly compounding. What is the present value of the lease?
PROBLEM 2 - Three years ago, a touching video was posted on YouTube. It's about a young soldier helping his mother pay off mortgage by giving her $50,000 after saving for two years. Suppose this soldier's total annual salary was $30,000 and the salary was paid monthly. He saved money by making monthly deposits into a saving account carrying an interest rate of 3 percent compounded monthly. Assume all deposits are at the end of a year, how much did he spend each month during the two years?
PROBLEM 3 - John and Mary bought a house in Thunder Bay 3 years ago. They took out a 30-year mortgage of $200,000 from RBC at that time. The stated interest rate is 6%.
(a) What is the effective monthly rate for this mortgage?
(b) What is the monthly payment of this mortgage?
(c) What would be the total interest cost (including the interest paid over the past three years) if this couple follows the monthly payment schedule to the end of the mortgage term?
(d) Today, following a friend's advice, John decides to switch to bi-weekly payments. What would be the monthly payment? And how much interest can he save? Assume John has just made the monthly payment, and the next payment is in one month.
(e) How much is the monthly payment if it is a US mortgage with the same principal amount, quoted rate and mortgage term?
Explain fixed and variable costs
: Written Components: Written document with critical analysis of the Risk/Return and Time Value of Money, Three Project Risk types, etc., Explain fixed and variable costs as they pertain to this type of business
|
What is no-trade relative price of car in the home country
: Suppose each worker in the home country can produce 2 cars or 3 TVs. Suppose each worker in the foreign country can produce 3 cars or 2 TVs. Assume that bouth countries each have 100 workers. Use the Ricardian model to answer the following: What is t..
|
What circumstances would market equilibrium be efficient
: Suppose the marginal cost of television sets is constant at $100. The annual demand for television sets is given by Q = 200,000 – 500 P, where Q is the quantity sold per year and P is the price of television sets. Under what circumstances would the m..
|
Price of olives in terms of beer
: Suppose that Greece and Switzerland both produce beer and olives. Greece's opportunity cost of producing a crate of olives is 5 barrels of beer while Switzerland's opportunity cost of producing a crate of olives is 10 barrels of beer. Based on your a..
|
What is the effective monthly rate for this mortgage
: John and Mary bought a house in Thunder Bay 3 years ago. They took out a 30-year mortgage of $200,000 from RBC at that time. The stated interest rate is 6%. What is the effective monthly rate for this mortgage
|
Determine the heat transfer for the process
: Saturated liquid water contained in a closed, rigid tank is cooled to a final state where the temperature is 50°C and the masses of saturated vapor and liquid present are 0.03 and 1999.97 kg, respectively. Determine the heat transfer for the proce..
|
Teacher training manual and licenses fitness instructors
: Richtone Design Group LLC (Richtone) is a New York limited liability company (LLC) that owns the copyright to the Pilates Teacher Training Manual and licenses fitness instructors to teach pilates exercise programs. Live Siri Art, Inc. is a California..
|
Find the final temperature in f
: The mass of refrigerant is 0.04 lb. For the refrigerant as the system, W = -0.56 Btu. Kinetic and potential energy effects are negligible. Determine the final temperature, in F.
|
Optimal thing to do when playing a prisoners dilemma
: The optimal thing to do when playing a prisoners' dilemma that is repeated for exactly 20 rounds against a rational player is to:
|