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1. A $300,000 mortgage loan is arranged at an APR of 12% compounded quarterly. The quarterly loan payments are calculated using a 20-year amortization period. After 2 years (immediately after you made the eighth payment) you have to move to a new city so you sell the house and you pay what is left of the loan to the bank. How much is your payment? Complete by hand, not in Excel.

a. $220,531.81

b. $247,892.37

c. $283,458.14

d. $291,698.79

2. What is the maximum amount a firm should pay for a project that will return $16,000 annually for 5 years if the opportunity cost is 10%?

A. $54,157.85

B. $56,861.80

C. $60652.59

D. $68,021.20

Financial Management, Finance

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