Use sufficient solution steps, and specific Excel functions =PV(), =FV();=PMT(), =NPER(), =RATE(), =PRICE() or =YIELD() whenever applicable.;Dont use any Amortization tables. Must be done in excel, put each case on a separate;tab. I will tip very well if all criteria is met with quality.;Case 1;You apply for a 20-year, fixed-rate (APR 6.48%) monthly-payment-required mortgage;loan for a house selling for $150,000 today. Your bank requires 22% initial down;payment of house value, and $3,000 closing cost (to be carried into loan balance and;amortized later) when the loan is approved.;(a) What is your monthly loan payment if you stick to the mortgage deal till the end;(assuming each payment is made at the end of each month)?;(b) 9 years after buying the house, what will be the remaining loan principal balance?;(Please note again it is a monthly mortgage.);(c) 9 years after buying the house, the loan market rate drops from 6.48% APR to 6.00%;APR. You plan to refinance, but the bank would charge an extra fee of $4,500 for;refinancing (which is carried into the current remaining loan balance for amortization).;Would you be able, and by how much, to lower your monthly loan payment if you;choose to refinance on the remaining loan principal balance over the remaining loan life;period? Based on your calculation results, should you choose to refinance or not?;(d) Redo the calculations in Question (c), assuming that the loan market rate drops from;6.48% APR to 5.76% APR (instead of 6.00%). Shall you choose to refinance then?;1;Case 2;By the end of each year, you contribute a $3,300 to your retirement fund portfolio, which;on average earns an annual nominal return of 11.25% over time. The annual contribution;continues for 36 years until you retire. (Note: All tax concerns are ignored here.);(a) By the time of your retirement, how much money would you have in your portfolio?;(without considering any inflation);(b) For your post-retirement life (which would last approximately another 28 years), by;the end of every year you withdraw and spend an equal amount of annuity payment from;your retirement fund account. What should be the annual payment amount you withdraw;if you do not want to leave any money to your heirs? (without considering any inflation);(c) Considering the long-term inflation averages 3.50% annually. How much money (at;real purchasing power) will you actually have when you retire? How much equal amount;should you withdraw and spend (at real purchasing power) by the end of each year for;your post-retirement life, provided that you leave no money to your heirs in the end?;(d) Again consider the long-term annual inflation 3.50%, and use the information you;obtain from the above (c). How much equal amount should you and your heirs withdraw;and spend (at real purchasing power) by the end of each year, provided that you and your;heirs can benefit from this fund generations after generations infinitely?;2;Case 3;You find a municipal bond issued by the Illinois state government.;The last sale settlement date is June 28, 2014, on which the bond price is quoted as;109.171 (Note: Bonds in US market are not quoted in $, but instead in % of par value).;The bonds coupon rate is fixed as 5.000 percent per year (coupon paid semiannually);and its yield to maturity (YTM) is quoted as 3.818 percent per year.;The bonds maturity date is October 01, 2051.;(a) Based on the aforementioned settlement date, maturity date, coupon rate, coupon;frequency and yield to maturity, what shall be the corresponding bond PRICE (in term of;% of par value)? Does your PRICE solution match the market quoted price?;(b) If the Fed tightens its monetary policy now, the financial market interest rates;generally rise, and thus the aforementioned bonds YTM also rises to 4.318 percent per;year. Will the corresponding bond PRICE go up or go down then? By how much?;(c) If the Fed loosens its monetary policy now, the financial market interest rates;generally drop, and thus the aforementioned bonds YTM also drops to 3.318 percent;per year. Will the corresponding bond PRICE go up or go down then? By how much?;(d) Based on your answers to (b) and (c), is there a positive, negative or zero association;between bond YIELD and its PRICE? What kind of risk effect is this called?
Paper#33110 | Written in 18-Jul-2015Price : $17