1. Alisha can afford car payments of $291 a month for 60 months. The bank will lend her money to buy a car at 6% APR compounded monthly (0.5% per month). How much money can he afford to borrow?
2. First State Bank offers you a $115,000, 6-year term loan at 10 percent annual interest. What will your annual loan payment be?
3. Find the present value of a 6-month forward long contract on an asset with a delivery price of $100,000 in 6 months. If the asset is worth $105,000 in 6 months, and the yearly rate of risk free interest is 4%, what is the value of the contract today.