MT/217 MT217 MT 217 Unit 7 Lab assignment

MT 217 Unit 7 Lab assignment 

Question 4

If you buy a factory for $250,000 and the terms are 20% down, the balance to be paid off over 30 years at a 12 percent rate of interest on the unpaid balance, what are the 30 equal annual payments? (Round to the nearest whole dollar)

Question 5

A generous benefactor to the local ballet plans to make a one minus time endowment which would provide the ballet with $150,000 per year in perpetuity. The rate of interest is expected to be 5 percent for all future time periods. How large must the endowment be?

Question 6

You have just taken out a 30minus year  mortgage on your new home for $120,000. This mortgage is to be repaid in 360 equal monthly installments. If the stated (nominal) annual interest rate is 14.75 percent, what is the amount of each of the monthly installments? Round to the nearest whole dollar.

Question 7

A 10minus year  ordinary annuity that provides a return of 7% has a present value of $15,000. What are the annual annuity payments?

Question 8

Find the present value of a 5 minus year annuity due if the annual payments are $600 and the interest rate is 11%. How much larger is the present value of the annuity due than the present value of the ordinary 5minus year annuity?

Question 9

Jennifer presents a business plan to her bank's loan officer that predicts net cash flows for the first three years of $10,000, $15,000, and $8,000 respectively. If these cash flows occur at the end of each year and the discount rate is 4%, what is the total present value of these cash flows? (Round to the nearest whole dollar)

Question 10

Assume that you will receive $2,000 a year in Years 1 through 5, $3,000 a year in Years 6 through 8, and $4,000 in Year 9, with all cash flows to be received at the end of the year. If you require a 14 percent rate of return, what is the present value of these cash flows? (Round to the nearest whole dollar)