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    Time Value of Money Homework 2

    Uploaded by

    Rashd Alqupaj
    This document contains a homework assignment with 5 questions calculating time value of money for investments and mortgages. It provides the calculations and answers for each question, involving interest rates, loan amounts, payments and time periods.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Time Value of Money Homework 2

    Uploaded by

    Rashd Alqupaj
    36 views2 pages
    This document contains a homework assignment with 5 questions calculating time value of money for investments and mortgages. It provides the calculations and answers for each question, involving interest rates, loan amounts, payments and time periods.

    Original Title

    Time_Value_of_Money_Homework__2.docx

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    This document contains a homework assignment with 5 questions calculating time value of money for investments and mortgages. It provides the calculations and answers for each question, involving interest rates, loan amounts, payments and time periods.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    36 views2 pages

    Time Value of Money Homework 2

    Uploaded by

    Rashd Alqupaj
    This document contains a homework assignment with 5 questions calculating time value of money for investments and mortgages. It provides the calculations and answers for each question, involving interest rates, loan amounts, payments and time periods.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 2

    Name______________Arifa Nagim

    _____________________

    Time Value of Money Homework Assignment #2


    5 questions – 3 points each – 15 points total

    1) Would you prefer making a $25,000 investment that will earn interest at the rate of
    6% compounded monthly or making the same $25,000 investment at 7%
    compounded annually? (Hint: Consider one year only).
    I would prefer to make a $25,000 investment compounded at 7% annually because it makes me
    $26,750 in one year, while the same investment compounded at will only make me $26,541.95

    2) Suppose you had a $2,450 per month mortgage payment for 30 years and with a
    loan at 3.75%. How much was your initial loan amount?
    PMT 2450
    NPER 360
    RATE 0.3125%
    FV 0
    ($529,025.59
    PV )
    The initial loan amount was $529,025.59

    3) Pete took out a mortgage loan 15-year loan for $575,000 and his monthly payment is
    $2,700. How much is the annual interest rate for the loan?

    PV 575,000
    FV 0

    This study source was downloaded by 100000863377806 from CourseHero.com on 04-27-2024 10:52:47 GMT -05:00

    https://www.coursehero.com/file/118639046/Time-Value-of-Money-Homework-2docx/
    PMT 2700
    NPER 180
    MONTHLY
    RATE 0.181%
    ANNUAL
    RATE 2.17%
    The annual rate of the mortgage is 2.17%

    4) Chris purchased a house that cost $600,000 and made a 20% down payment. He
    got a loan at 2.75% for 30 years. What is Chris’ monthly mortgage payment?

    PV 480000
    FV 0
    NPER 360
    RATE 0.23%
    PMT ($1,959.56)
    The monthly payment is $1,959.56

    5) Lydia takes out a $475,000, 30- year mortgage loan at 4.50% interest payment.
    What is her monthly mortgage payment?
    PV 475000
    FV 0
    NPER 360
    RATE 0.38%
    PMT ($2,406.76)
    The monthly payment is $2,406.76

    This study source was downloaded by 100000863377806 from CourseHero.com on 04-27-2024 10:52:47 GMT -05:00

    https://www.coursehero.com/file/118639046/Time-Value-of-Money-Homework-2docx/
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