BMGT 340 Study Guide - Midterm Guide: Net Present Value, Nominal Interest Rate, Amortizing Loan

• School: University of Maryland
• Department: Business and Management
• Course: BMGT 340
• Professor: Michael Padhi

Document Summary

Choose the one alternative that best completes the statement or answers the question: mac took out a 5 year fully amortizing loan of ,000. What is the remaining balance on the loan if mac just made his 6th payment: ,532. 02, ,647. 67, ,090. 13, ,898. 11, ,856. 22. Explanation: a: convert ear to apr: nom (6. 515, 4) = 6. 362. Make apr in terms of every 3 months: 6. 362 / 4 = 1. 590. Pv = ,647. 67: you have a plan to save different amounts each year: in the first year, per year for the following two years, and per year in years 4 and 5. If the interest rate is 6%, how much will you have 5 years from now: . 48, . 08, . 26, . 84, . 16. Explanation: a: using the net present value equation in your calculator. Fv = : suppose last year you earned a nominal rate of return of 12. 20% on one of your investments.