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bulgar [2K]
4 years ago
8

Think about a financial decision you made regarding the purchase of a big-ticket item or investment within the last five years.

Provide a summary on the discussion thread, answering the following questions:What decision did you make?How prepared were you to make the decision?What was your thought process as you were making the decision?What financial information did you need to make the decision and why?What lessons have you learned that you will apply to future financial decisions?
Business
1 answer:
vovikov84 [41]4 years ago
8 0
To make a large purchase (most) ask the following questions, worthwhile?, investment opportunities?, lasting of purchase?, and necessity or want.
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A homeowner could take out a 15-year mortgage at a 5.5 percent annual rate on a $195,000 mortgage amount, or she could finance t
Montano1993 [528]

Answer:

The amount of total interest over the entire mortgage period could she save by financing her home with the 15-year mortgage is $138,612

Explanation:

First find the total interest on the 30-year mortgage:

PV = 195,000

N = 360

FV = 0

I = 6.1/12 = 0.5083

195,000 = PMT × PVIFA (0.061/12, 360 months); (in excel)

PMT of 1,181.69 × 360 = 230,408;

Next find the total interest on the 15-year mortgage:

PV = 195,000

N = 180

FV = 0

I = 5.5/12 = 0.4583

195,000 = PMT × PVIFA (0.055/12, 180 months); (in excel)

PMT of 1,593.31 × 180 = 91,796;

The amount of interest saved is: $230,408.34 − $91,796.29 = $138,612.05

7 0
3 years ago
The Club Auto Parts Company has just recently been organized. It is expected to experience no growth for the next 2 years as it
Ratling [72]

Answer:

P1=$8.43

Explanation:

D1= 0.5\\D2=0.5\\D3=D2(1+g3) = 0.5(1.05)=0.525\\D4=D3(1+g4) = 0.5(1.05)(1.1) =0.5775\\

The value of the stock is equal to the present value of all cash-flows expected from holding the stock. At the end of year 1, the value of the stock is found by calculating the present value of the remaining dividends i.e D2, D3, D4, D5 etc till infinity.

Therefore price equalsP1=\frac{D2}{1+ke} + \frac{D3}{(1+ke)^{2} }  +\frac{D4}{(ke-g)(1+ke)^{3} }

given the values of Dividends calculated above and ke= 15% :

P1=\frac{0.5}{1.15^{1} } +\frac{0.525}{1.15^{2}} +\frac{0.5775}{(0.15-0.1)(1.15^{3} } = $8.43

7 0
3 years ago
Majestic Homes' stock traditionally provides an 8% rate of return. The company just paid a $2 a year dividend which is expected
NemiM [27]

Answer:

The intrinsic value per year would be $52.5

Explanation:

We use the gordon model for stock valuation:

\frac{divends}{return-growth} = Intrinsic \: Value

current year dividends dividends x (1 + rgowth) = next year dividends

$2 * ( 1 + 0.05 ) = 2.10

then:

rate = 0.09

growth = 0.05

2.10/(0.09-0.05) = 52.5

3 0
4 years ago
Read 2 more answers
When do things move faster? Day or night?​
Nady [450]

day

Explanation:

bc its day time and your doing things lol

4 0
3 years ago
Read 2 more answers
Over a 38-year period an asset had an arithmetic return of 12.4 percent and a geometric return of 10.3 percent. Using Blume’s fo
alina1380 [7]

Answer:

Blume's formula combines the geometric and arithmetic means of an asset to be able to predict its returns in a given period.

The formula is;

= Geometric Mean*(T-1)/(N-1) + Arithmatic Mean *(N-T)/(N-1)

Where,

T = Period in question

N = Total period

6 years

= 10.3%*(6-1)/(38-1) + 12.4%*(38-6)/(38-1)

= 12.1 %

10 years

= 10.3%*(10-1)/(38-1) + 12.4%*(38-10)/(38-1)

= 11.89%

19 years

= 10.3%*(19-1)/(38-1) + 12.4%*(38-19)/(38-1)

= 11.38%

7 0
3 years ago
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