1.Calculate the monthly mortgage payment made at the beginning of each month on a $100,000 mortgage. The mortgage is for 15 years and the interest rate in 5.5 percent.
4.EZ Leifer plans to retire at the age of 65 and believe he will live to be 90. EZ wants to receive an annual retirement payment of $50,000 at the beginning of each year. He sets up a retirement account that is estimate to earn 6 percent annually.
a. How mch money must EZ have in the account when he reaches 65 years old?
b. EZ is currently 29 years of age. How much must he invest in this account at the end of each year for the next 36 years to have require amount in his account at age 65?
3. You have been shopping for a new home and you have choice of financing. You can choose either a $200,000 mortgage at 4.75% for 30 years, or a $200,000 mortgage at 3.5% for 15 years.
Calculate the monthly payment for both 30 year an 15 year mortgage.
4. What is the payback if an investment's cost is $45,000 and the after tax benefit in $2,000 per year?
5. Joe Morton buys a piece of equipment for $200,000. He puts down $40,000 and finances $160.000. Joe's opportunity cost is 4%. and the lender's interest rate is 8%. Find the weighted average cost of capital.
6.Manny Kurr is considering the purchase of a beauty salon. The initial cost of this purchase is $16,000.The after-tax cash flows from this investment should be $4,000 per year for the next 5 years. His opportunity cost of capital is 10%. Calculate the payback - Should Manny buy the beauty salon based on payback if his required payback is less than 3 years?