Economic theory offers ____________________ about the full range of possible events and responses, which can prevent ___________
1 answer:
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The monthly mortgage payment including principal and interest is $1,936.25
Explanation:
PV = (1 - 0.20) × $325,000 = $260,000
r = 0.041 / 12
t = 15 * 12 = 180
C = $260,000 ÷ [1 - {1 / (1 + 0.041 / 12)∧180} / (0.041 / 12)]
C = $1,936.25
The monthly mortgage payment including principal and interest is $1,936.25
Answer: I must invest <u>$85424.14</u> today in order to buy a Ferrari nine years from now on the day I turn 30.
We have
Price of the Ferrari nine years from now (Future Value - FV) $215000
Expected Rate of return on the mutual fund (r) 10.8%
Time until I turn 30 (n) 9 years
We can calculate the Present Value (PV) or the money to be invested today as
Answer:
b. 1,062.81
Explanation:
the key to answer this question is to remember that valuation of a bond depends basically of calculating the present value of a series of cash flows, so let´s think about a bond as if you were a lender so you will get interest by the money you lend (coupon) and at the end of n years you will get back the money you lend at the beginnin (principal), so applying math we have the bond value given by:
where: principal as said before is the value lended, coupon is the rate of interest paid, i is the interest rate and n is the number of periods
so applying to this particular exercise, as it is not said we will assume that 6% and 7% are interest rate convertible seminually, so the price of the bond will be:
price=1,062.81
take into account that here we are asked about semianually payments, so in 8 years there are 16 semesters.