Hi everyone,
I am studying for a financial math exam and I am really stuck on this problem, especially on the second part and I am looking to an explanation on how to solve it.
Any help would be appreciated!!
Thank you for your time.
Tizio has a capital of € 100,000 which shares equally between two investments with the following characteristics:
A: Purchase of three-year BTPs with semi-annual coupons, j(2)=5%, price=100 euros and repayment value=100;
B: Granting of a loan with repayment in 5 years of constant annual installments and interest rate of 10%.
Draw up the complete loan amortization plan B.
Tizio deposits each amount collected (coupons, refund values at maturity and loan installments) in an account that guarantees an annual remuneration of 3%.
Determine the future value at the end of the fifth year of the two investments and of the overall transaction.
I am studying for a financial math exam and I am really stuck on this problem, especially on the second part and I am looking to an explanation on how to solve it.
Any help would be appreciated!!
Thank you for your time.
Tizio has a capital of € 100,000 which shares equally between two investments with the following characteristics:
A: Purchase of three-year BTPs with semi-annual coupons, j(2)=5%, price=100 euros and repayment value=100;
B: Granting of a loan with repayment in 5 years of constant annual installments and interest rate of 10%.
Draw up the complete loan amortization plan B.
Tizio deposits each amount collected (coupons, refund values at maturity and loan installments) in an account that guarantees an annual remuneration of 3%.
Determine the future value at the end of the fifth year of the two investments and of the overall transaction.