1. You are looking to buy a car. You can afford $610 in monthly payments for five years. In addition to the loan, you can make a $710 down payment. If interest rates are 9.00 percent APR, what price of car can you afford?
2. The holders of ZZZ Corporation’s bonds with a face value of $1,000 can exchange that bond for 35 shares of stock. The stock is selling for $25 per share. What is the conversion value of the bond?
3. The holder of a $1,000 face value bond can exchange the bond any time for 25 shares of stock. What is the conversion ratio?