Please answer the following finance questions. PLEASE SHOW ALL WORK/STEPS IN SOL
ID: 2661087 • Letter: P
Question
Please answer the following finance questions. PLEASE SHOW ALL WORK/STEPS IN SOLVING THE PROBLEMS!
1. Shibuya Corporation has borrowed $1.5 million from a bank with the understanding that it will pay $80,000 per month until the loan is paid off. The bank will charge 9% per annum interest on the unpaid balance, calculated monthly. Shibuya will make the payments at the end of each month. Find the following :
(A) How long will it take Shibuya to pay off the loan?
(B) What is the partial payment for the last month?
2. Taryn is planning for her retirement. She has 35 years before she retires. She plans to keep the money in a bank, which will pay interest at the annual rate of 3% and compound it monthly. She will start by deposting $250 in the account at the beginning of the first month. In the second and subsequent months, she will increase the deposit by 1/2% every month. How much money will there be in the account after 35 years?
3. Taito Inc. has 5.5% bonds that will mature on January 15, 2021. They pay interest semiannually on January 15 and July 15. On July 10, 2014, these bonds are selling at $885 each. If your required annual rate of return is 8%, should you buy these bonds?
Explanation / Answer
2.
2. Taryn is planning for her retirement. She has 35 years before she retires. She plans to keep the money in a bank, which will pay interest at the annual rate of 3% and compound it monthly. She will start by deposting $250 in the account at the beginning of the first month. In the second and subsequent months, she will increase the deposit by 1/2% every month. How much money will there be in the account after 35 years
FV = 250*1.0025*(1.0025^(35*12)-1.005^(35*12))/(.0025-.005) = $528281.65