Question-1:
You want to buy an automobile that costs $30,000. You have $5,000 for a down payment and have to borrow the rest of the amount. A commercial bank has agreed to extend you a 3 year loan for an annual interest rate of 7%.
a. How large would each annual payment be? (1 point)
Answer:
b. Construct an amortization schedule. (2 points)
Answer:
Question-2: (2 points)
You are considering a 15 year, $1,000 par value bond. Its coupon rate is 8%, ad interest is paid semi-annually. If you require an "effective" annual interest rate (not a nominal rate) of 9.16%, how much should you be willing to pay for the bond?
Answer:
peincemo
fin_moe.docx
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