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- Greg wants to have $50 000 in five years. He has $20 000 today to invest. The bank is offering five-year investment certificates that pay interest compounded quarterly. What is the minimum nominal interest rate he would have to receive to reach his goal?3. If you decided to take the $250,000 cash payment today, but saved that in your bank account at 3%, how much would you have saved up in your bank account in 20 years?Suppose that you saved $4,700 at the beginning of the year and that at the end of the year your savings account has $6,100 in it. What interest rate did you earn?
- How do interest rates affect bond yield and bond prices.Imagine that a local water company issued a $10,000 ten-year bond at an interest rate of 6%. You are thinking about buying this bond one year before the end of the ten years, but interest rates are now 9%. Calculate what you would actually be willing to pay for this bond.Say you wish to withdraw 10,000 pesos per year for 10 years starting next year. How much should you save now in a bank bearing an 8% interest rate?
- Do you believe yesterday's Interest Rate Increase of 0.50% by the Bank of Canada was necessary? If so, why?3. You will need $100,000 in seven years to buy a new car. How much money do you need to deposit in the bank now in order to have $100,000 seven years from now if the interest rate is 7%?You decide to purchase a new home and need a $80,000 mortgage. You take out a loan from the bank that has an interest rate of 10%. What is the yearly payment to the bank to pay off the loan in 10 years? FP = $(Round your response to two decimal places.)
- Solve in a bond paper pleaseWhy are bonds somewhat risky to buy, even though they make predetermined payments based on a fixed rate of interest?Economics You are planning to take out a 5 hundred thousand dollar fixed-rate mortgage with a 30- year term and a stated annual mortgage rate of 5.7 percent. Your lender offers to lower your stated annual interest rate by one-quarter of a percentage point for each discount point you buy. What will your monthly payment be if you buy 3 discount points? Round your answer to the nearest dollar. Answer the following based on the information from the previous question. Approximately how many months do you need to stay in the mortgage to make it worthwhile to pay the discount points? Round your answer to two decimal places.