Question: TV's R Yours is advertising a deal, in which you buy a flat screen TV/entertainment package for $2,388.35 (including tax) with one year before you need to pay (no interest is incurred if you pay by the end of the one year). How much would you need to deposit at the end of each month in a savings account earning 0.9% APR, compounded monthly, to be able to pay the $2,388.35 bill in one year?
Monthly Deposit:
You purchase a house for $300,000 by getting a mortgage for $240,000 and paying a $40,000 down payment (20%). You can get a 30 year mortgage with a 3.48% interest rate.
A. What would be your monthly payment?
B. What would be the loan balance half way through, at the end of 15 years?
If the present value of an ordinary, 10 year annuity is $20,000 and interest rates are 6%, what is the present value of an annuity due with the same length of life, payments and interest rate? Present Value:
A credit card is offered with monthly payments and a 29.99% APR. What is the loan's effective annual rate (EAR)?
EAR:
Calculate the price of a $1,000 bond, offering a 8% coupon payment with 30 years left to maturity and a market interest rate of 10%. (Assume interest payments are semiannual.) Is this a discount or premium bond?