Financing Help Please (Bonds, YTM, EAR, PV)?

[adin55]

1) Big Dom's Pawn Shop charges an interest rate of 16 percent per month on loans to its customers. Like all lenders, Big Dom must report an APR to consumers. What rate should the shop report? What is the effective annual rate?

2) You want to buy a new sports car from Muscle Motors for $53,000. The contract is in the form of a 36-month annuity due at a 9.80 percent APR. What will your monthly payment be?

3) You have just won the lottery and will receive $1,000,000 in one year. You will receive payments for 30 years, which will increase 5 percent per year. The appropriate discount rate is 8 percent. What is the present value of your winnings?

4) You need a 30-year, fixed-rate mortgage to buy a new home for $240,000. Your mortgage bank will lend you the money at a 6.35 percent APR for this 360-month loan. However, you can afford monthly payments of only $1,150, so you offer to pay off any remaining loan balance at the end of the loan in the form of a single balloon payment. How large will this balloon payment have to be for you to keep your monthly payments at $1,150?

5) Barcain Credit Corp. wants to earn an effective annual return on its consumer loans of 16 percent per year. The bank uses daily compounding on its loans. What interest rate is the bank required by law to report to potential borrowers?

6) Meadow Brook Manor would like to buy some additional land and build a new assisted living center. The anticipated total cost is $29 million. The CEO of the firm is quite conservative and will only do this when the company has sufficient funds to pay cash for the entire construction project. Management has decided to save $1.6 million a quarter for this purpose. The firm earns 6 percent compounded quarterly on the funds it saves. How long does the company have to wait before expanding its operations?

7) You are borrowing $5,400 to buy a car. The terms of the loan call for monthly payments for 4 years at a 5.00 percent interest. What is the amount of each payment?

8) One More Time Software has 9.2 percent coupon bonds on the market with 19 years to maturity. The bonds make semiannual payments and currently sell for 85.8 percent of par. What is the current yield on bonds? What is the YTM? What is the effective annual rate?

9) Kiss the Sky Enterprises has bonds on the market making annual payments, with 17 years to maturity, and selling for $940. At this price, the bonds yield 11.0 percent. What must the coupon rate be on the bonds?

10) Staind, Inc., has 6 percent coupon bonds on the market that have 11 years left to maturity. The bonds make annual payments. If the YTM on these bonds is 10 percent, what is the current bond price?

[darrell]

Seriously? You are posting your exam online for others to do for you? Look in your textbook. Try youtube for videos on how to calculate YTM, PMT, EAR, etc. You can even search by the type of calculator you have and learn how to input the info from the problem, which buttons to push, etc. These problems come straight from a first finance course. You may want to check with your professor or a tutoring service available from your school. But I'm sure that posting an exam for others to answer violates some kind of honor/integrity code that your school imposes on its students.