short finance question problems

Please read the attachment and include an excel
document showing the solutions. Thank you

1.Your company is planning to borrow $3,000,000 on a 5-year, 10%, annual
payment, fully amortized term loan. What fraction of the payment made at the
end of the second year will represent repayment of principal? Round your answer
to two decimal places.

2. a) It is now January 1. You plan to make a total of 5 deposits of $100 each,
one every 6 months, with the first payment being made today. The bank pays a
nominal interest rate of 12% but uses semiannual compounding. You plan to
leave the money in the bank for 15 years. How much will be in your account after
15 years? Round your answer to the nearest cent.

b) You must make a payment of $1,533.06 in 10 years. To get the money for this
payment, you will make 5 equal deposits, beginning today and for the following 4
quarters, in a bank that pays a nominal interest rate of 8% with quarterly
compounding. How large must each of the 5 payments be? Round your answer
to the nearest cent.

3. Find the interest rate (or rates of return) for each of the following situations.
Round your answers to two decimal places. Put answer as a %.

a. You borrow $750 and promise to pay back $825 at the end of 1 year.

b. You lend $750 and receive a promise to be paid $825 at the end of 1 year.

c. You borrow $80,000 and promise to pay back $122,318 at the end of 13
years.

d. You borrow $10,000 and promise to make payments of $2,445.7 at the
end of each year for 5 years.

4. Find the present value of the following ordinary annuities. Round your answers
to the nearest cent.

a. $600 per year for 10 years at 10%.

b. $300 per year for 5 years at 5%.

c. $600 per year for 5 years at 0%.

Now rework parts a, b, and c assuming that payments are made at the beginning
of each year; that is, they are annuities due.

d. $600 per year for 10 years at 10%.

e. $300 per year for 5 years at 5%.

f. $600 per year for 5 years at 0%.

5. If you deposit money today in an account that pays 5.6% annual interest, how
long will it take to double your money? Round your answer to the nearest whole.
Put your answer in terms of years.

6. a) An investment will pay $200 at the end of each of the next 3 years, $400 at
the end of Year 4, $600 at the end of Year 5, and $800 at the end of Year 6. If
other investments of equal risk earn 8% annually, what is its present value?
Round your answer to the nearest cent.

b) What is its future value? Round your answer to the nearest cent.

7. To complete your last year in business school and then go through law school,
you will need $25,000 per year for 4 years, starting next year (that is, you will
need to withdraw the first $25,000 one year from today). Your rich uncle offers to
put you through school, and he will deposit in a bank paying 4.2% interest a sum
of money that is sufficient to provide the 4 payments of $25,000 each. His
deposit will be made today.

a. How large must the deposit be? Round your answer to the nearest cent.
$

b. How much will be in the account immediately after you make the first
withdrawal? Round your answer to the nearest cent.
$
How much will be in the account immediately after you make the last
withdrawal? Round your answer to the nearest cent.
$

8. Assume that you inherited some money. A friend of yours is working as an
unpaid intern at a local brokerage firm, and her boss is selling securities that call
for 4 payments of $50 (1 payment at the end of each of the next 4 years) plus an
extra payment of $1,000 at the end of Year 4. Your friend says she can get you
some of these securities at a cost of $950 each. Your money is now invested in a
bank that pays an 8% nominal (quoted) interest rate but with quarterly
compounding. You regard the securities as being just as safe, and as liquid, as
your bank deposit, so your required effective annual rate of return on the
securities is the same as that on your bank deposit. You must calculate the value
of the securities to decide whether they are a good investment. What is their
present value to you? Round your answer to the nearest cent.
$

9. a) What’s the future value of a 3%, 4-year ordinary annuity that pays $350
each year? Round your answer to the nearest cent.
$

b) If this were an annuity due, what would its future value be? Round your
answer to the nearest cent.
$

10. To the next whole year, how long will it take $200 to double if it is deposited
and earns the following rates? Round your answers up to the next highest year.

a. 7.4%.
Answer in year(s)

b. 9.3%.
Answer in year(s)

c. 17%.
Answer in year(s)

d. 100%.
Answer in year(s)

11. Universal Bank pays 7% interest, compounded annually, on time deposits.
Regional Bank pays 6%, compounded quarterly.

a. Based on effective interest rates, in which bank would you prefer to
deposit your money?

I. You would choose Regional Bank because its EAR (or EFF%) is higher.
II. You would choose Regional Bank because its nominal interest rate is
higher.
III. You are indifferent between the banks and your decision will be based
upon which one offers you a gift for opening an account.
IV. You would choose Universal Bank because its EAR (or EFF%) is
higher.
V. You would choose Universal Bank because its nominal interest rate is
higher.

b. Could your choice of banks be influenced by the fact that you might want
to withdraw your funds during the year as opposed to at the end of the
year? In answering this question, assume that funds must be left on
deposit during the entire compounding period in order for you to receive
any interest.

I. If funds must be left on deposit until the end of the compounding period
(1 year for Universal Bank and 3 months for Regional Bank), and you think
there is a high probability that you will make a withdrawal during the year,
then Regional Bank might be preferable.
II. If funds must be left on deposit until the end of the compounding period
(3 months for Universal Bank and 1 year for Regional Bank), and you think
there is a high probability that you will make a withdrawal during the year,
then Regional Bank might be preferable.
III. If funds must be left on deposit until the end of the compounding period
(1 year for Universal Bank and 3 months for Regional Bank), and you

have no intentions of making a withdrawal during the year, then Regional
Bank might be preferable.
IV. If funds must be left on deposit until the end of the compounding period
(1 year for Universal Bank and 3 months for Regional Bank), and you think
there is a high probability that you will make a withdrawal during the year,
then Universal Bank might be preferable.
V. If funds must be left on deposit until the end of the compounding period
(3 months for Universal Bank and 1 year for Regional Bank), and you think
there is a high probability that you will make a withdrawal during the year,
then Universal Bank might be preferable.