Q1 A truck costing 119000 is paid off in monthly installment

Q1:

A truck costing $119,000 is paid off in monthly installments over four years with 8.7?% APR. After three years the owner wishes to sell the truck. What is the closest amount from the following list that he needs to pay on his loan before he can sell the? truck?

A.$33,723

B.$26,978

C.$47,212

D.$ 40,467

Q2:

Q3:

A university issues a bond with a face value of $5,000

and a coupon rate of 4.87?% that matures on? 07/15/2018. The holder of such a bond receives coupon payments of $121.75.

How frequently are coupon payments made in this? case?

A.quarterly

B.monthly

C.annually

D.semiannually

Q4:

Q5:

A risk-free zero-coupon bond has 15 years to maturity Which of the following is closest to the price per S100 of face value that the bond will trade at if the YTM is 7%? OA. $38.7 OB. $29.55 OC. $36.24 OD. $32.68

Solution

1.

=FV(8.7%/12,12*3,PMT(8.7%/12,12*4,119000),119000)=33722.55

2.

=PV(7%,15,0,100)=36.24

3.

Number of years between coupon payment=121.75/(5000*4.87%)=0.5

Hence coupon payment is made semiannually

4.

Prior to its maturity date, the price of a zero-coupon bond is always greater than its face value

5.

=PV(7.5%,20,0,1000)=235.41