Problem
Answer the two part question to question 1 (dont round until the absolute end. show all full answers)
I. What is the most you would be willing to pay for an investment that will pay you $437 in one year, $846, in two years, and $697 in three years, if your required rate of return for this type of investment is 22% ?
II. Prepare the first row of a loan amortization schedule based on the following information. The loan amount is for $1,433 with an annual interest rate of 10.00%. The loan will be repaid over 4 years with monthly payments.
i. What is the Loan Payment?
ii. What portion of this payment is Interest?
iii. What portion of this payment is Principal?
iv. What is the Loan balance after first monthly payment?