An Investor Wants to Determine How Much Interest He Must

question 54

Multiple Choice

An investor wants to determine how much interest he must earn to be able to make the payments on a 10-year mortgage which has increasing annual payments. The problem is summarized in the accompanying spreadsheet. The investor has enough money to make an initial investment of $9,000 and hopes he can earn 12%, compounded quarterly, on his investments. He would like to know how low his annual return can be and still allow him to make his payments from interest income. What formula goes in cell C7 of the spreadsheet?

• A) =B7*(1+$C$3/4)^4-B7
• B) =B7*(1+$C$3)-B7
• C) =B7*($C$3/4)^4-B7
• D) =B7*(1+$C$3/4)^4

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Definitions:

Documents Of Title

Legal documents that provide proof of ownership over goods or property, crucial in the transfer of rights from one party to another.

Dock Warrants

Documents that certify the ownership of goods stored in a warehouse or dock, enabling the holder to take possession or control of the goods.

Dock Receipts

Documents used in the transportation industry that acknowledge receipt of goods by a carrier for shipment.

Security Interest

A legal claim or lien on collateral that has been pledged, usually to secure repayment of a loan.