ALL CASH FLOW DIAGRAMS
1. A credit card company charges 19.6% pert year interest. Compute the effective annual rate if they compound: A nnual y, monthly and daily.
2. An investor has funds deposited at 5.75% interest per year. How long it will be before she can triple her money.
3. Baby's Joe's grandparents decided to start depositing $1000/yer in his 3rd birthday and plan to continue doing so unitl his 19th birthday. How much money will be in the account on his 19th birthday, assuming it makes 4% per year interest.
4. Joe (from question 3) wonders how much money he can darw per year from this account during his 20, 21. 22 and 23 bi rthdays to help pay his college expesnses.
5. A dealer offers a $25,000 car with a downpayment of $1,000 and 60 easy monthly payments of $469.99. How much monthly rate is he charging?
6. A individual is borrowing 135,000 for a 15 year loan at 4.37% per year compounded monthly. Calculate his monthly payment.
7. For the loan described under Q6, what would be the amount owed to the bank if the individual decides to sell the house immediately after the 100th mortgage payment?
8. An international bank is charging a nominal intrest rate of 1.99% per year compounded continuously. What is the effective annual interest rate?
9. An individual plans to buy a stock valued at $135 each and keep it for 5 years at which point he things he can sell it for $155. The stock pays an annual dividend of $3.5. What is equivalent annual interest rate being generated by this investment? (i.e., interst rate that makes the present worth of this investment = 0)
10. An individual is borrowing $115,000 for a 18 year loan at 3.75% per year compounded monthly. Compute the monthly payment.
11. Continue on Q 10: Immediately after the 56 monthly payment, the home owner plans to sell the house. How much money is owed back to the bank?
12. Alternative to Q 11. Immediately after the 56th payement, the home owner wins a $25,000 lottery ticket, decides to keep the house and continue making payements of the same monthly amount. How long will it take to pay off the mortgage?
13. One more question on the mortage of Q 11: Compute the spilt between principal and interest paid with the 104th monthly payment of this loan.