Financial Math Answers

Delta’s stock has 30% chance of producing a 15% return, a 40% chance of producing a 10% return, and a 30% chance of producing a 2% return. What is the firm's expected rate of return?

An issue of common stock’s most recent dividend is $1; its growth rate is 5%. What is its price if the required rate of return is 10%?

An issue of preferred stock is paying an annual dividend of $1.50. The growth rate for the firm's common stock is 5%. What is the preferred stock price if the required rate of return is 7%?

I. A family buys a house worth $326,000. They pay $75,000 deposit and take a mortgage for the balance at J12=9% p.a. to be amortized over 30 years with monthly payments. Find the value of the mortgage on their house and the value of the monthly payment.

II. Find the present value of $10,000 received at the start of every year for 20 years if the interest rate is J1 = 12% p.a. and if the first payment of $10,000 is received at the end of 10 years.

$9000 loan is to be repaid over 7 years with monthly payments of J12=12% p.a. Determine the amount of principal that is paid on the 5 payment.

a. Esther, Vida, and Clair were asked to consider two different cash flows: GH¢1000 that they could receive today and GH¢3000 that would be received 3 years from today. Esther wanted the GH¢1000 today, Vida chose to collect GH¢3000 in 3 years, and Clair was indifferent between these two options. Which of the three women made the right choice? Explain.

A loan of $500 is to be paid with two payments of $300, one in 3 months, and another in 6 months. The compound interest charged per-annum on the loan is:

Rene has R60000 invested among a checking account, a savings account and a bond paying, respectively, 2%, 5% and 7% annual interest rate. She invested R23000 less in her savings account than in her bond. She earns a total of R3550 in annual interest. How much did she invest in each account

McTavish wants to buy a new car worth $20,000. He pays $2,000 deposit and agrees to pay $400 at the end of each month as long as necessary. Find the concluding payment one month later if interest is at 12% p.a. compounding monthly