Find the present value of the remaining payments

Assignment Help Financial Management
Reference no: EM131189833

During the course of your education, you have borrowed $65,000 in student loans. You plan to make monthly payments in order to repay the debt. The interest rate is fixed at 6.8% APR (compounding is monthly). a. If the loan is for 10 years, find the monthly payment. b. Right after your 38th payment, you get a huge bonus and decide to pay off the loan. Find the present value of the remaining payments.

Reference no: EM131189833

Questions Cloud

Design tax-efficient compensation plan : The compensation committee of a large public corporation engages you to help design a tax-efficient compensation plan for the current chief executive officer (CEO). In a preliminary interview with the compensation committee, you ask for the opportuni..
What is proper or customary behavior in work environment : What is the proper or customary behavior in your work environment? This will often be a topic within the organization you work for and is tied to the company culture. Social networking sites like Facebook, LinkedIn, and Twitter are pervasive and comm..
The revenue and expense accounts at that date reflect : Assume for each of the following independent cases that the annual accounting period ends on December 31, 2014, and that the revenue and expense accounts at that date reflect a loss of $30,000. Assume that the company is a sole proprietorship owned b..
Construct spreadsheet to replicate the analysis of table : Construct a spreadsheet to replicate the analysis of the table. That is, assume that $10,000 is invested in a single asset that returns 7 percent annually for twenty-five years and $2,000 is placed in five different investments, earning returns of 10..
Find the present value of the remaining payments : During the course of your education, you have borrowed $65,000 in student loans. You plan to make monthly payments in order to repay the debt. The interest rate is fixed at 6.8% APR (compounding is monthly). a. If the loan is for 10 years, find the m..
Which portfolio has the best diversification : Which portfolio has the best diversification?
Issued bond at face value : Suppose that SBC issued a bond at face value on June 15, 2010 that will mature on June 15, 2026. The price of the bond on June 15, 2016 was quoted as $103.2 per $100 of face value. You have taken finance, so you know it will cost you $1032 to buy thi..
Positive or negative present value of growth opportunities : Farm just reported earnings per share of $6.40. The payout rate is 70% and the return on equity is 25%. The required return is 12.5%. a. Find the price of the stock. b. Will this firm have a positive or negative present value of the growth opportunit..
Compare the capital structure of general electric and bank : Compare the capital structure of General Electric (GE) and Bank of America's capital structure for each. Explain your conclusions on the similarities and differences. What factors can you suggest for why each company adheres to their chosen structuri..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the nominal annual rate of return

A share of preferred stock pays a quarterly dividend of $2.50. If the price of this preferred stock is currently $50, what is the nominal annual rate of return? show work

  What will andrews ending balance in retained earnings

The Andrews company currently has the following balances in their equity accounts: Common Stock $83,080 Retained earnings $83,305 Suppose next year the Andrews company generates $46,300 in Net Profit, and declares and pays $16,000 in Dividends. What ..

  What percentage of company capital structure consist of debt

Miller Von Enterprises' capital structure consists solely of debt and common equity. It can issue debt at rd = 10.6%, and its common stock currently pays a $1.91 dividend (D0= $1.91). What percentage of the company's capital structure consists of deb..

  What is the standard deviation of the stocks returns

You find a certain stock that had returns of 11 percent, −14 percent, 23 percent, and 19 percent for four of the last five years. The average return of the stock over this period was 10.48 percent. What was the stock’s return for the missing year? Wh..

  Considering an investment contract

You are considering an investment contract that pays equal $15,000 amounts at the end of each of the next 20 years. If you require an effective annual return of 7 percent on this investment, how much will you pay for the contract today?

  Maturity quoted at discount yield

What is the price of a U.S. Treasury bill with 56 days to maturity quoted at a discount yield of 1.20 percent? Assume a $1 million face value.

  About the industrial production rate and the inflation rate

Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 5% and IR 6%. A stock with a beta of 1 on IP and 0.5 on IR currently is expected to provide a rate..

  Describe the risk structure of the interest rates

Describe the risk structure of the interest rates. Describe the classical theory of interest rate determination Compare and contrast the expectations theory and the liquidity premium theory of the term structure of interest rates.

  What is the firms return on equity

In the year that just ended, Callaway Lighting had sales of $5,470,000 and incurred cost of goods sold equal to $4,460,000. The firm's operating expenses were $128,000 and its increase in retained earnings was $42,000 for the year. There are currentl..

  In which of these stocks should you invest

You are considering three stocks for investment purposes. The required return on the market portfolio is 14%, and the riskless return is 9%. Based on the information given, in which (if any) of these stocks should you invest?

  Under writers have informed the firms management

The beranek company whose stock price in now $25 need to raise $20 million in common stock. Under writers have informed the firms management that they must price the new issue to the public at $22 per share because of signaling effects. How many shar..

  Provide a rationale for the stock repurchase

MGM Grand said it plans to eventually buy back up to 20% of its shares (from stockholders) and announced a tender offer for half of them at a 31% premium (over the market price). Provide a rationale for the stock repurchase.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd