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Question 1: Taneja Stationaries borrowed $10,000 from Duca Credit Union at 7% compounded quarterly. The loan is to be repaid by quarterly payments over a two-year term. Construct the amortization schedule for the loan. [4 Marks] Question 2: A $600,000 mortgage loan is written with a 25-year amortization period, a five-year term, and an interest rate of 1.8%. Payments are made monthly. What will be the balance at the end of the five- year term? The size of the payments upon renewal for a three-year term at 4.8%? [4 Marks] Question 3: A couple have saved $120,000 for the down payment on a home. Their monthly gross income is $9,000. They have no existing loans. Their bank has upper limit of 34% for GDS ratio and 40% for the TDS ratio. Allowing for property taxes of $250 per month and heating costs of $200 per month, what maximum monthly mortgage payment do the GDS and TDS ratios permit? What is the maximum mortgage loan for which the couple can qualify (Use a 30-year amortization and an interest rate of 1.6% compounded semi-annually for a five-year term)? What is the maximum amount they can pay for buying a house? [2 + 2 + 1 = 5 Marks] Question 4: The interest rate for the first five-year term of a $400,000 mortgage loan is 2.3% compounded semi-annually. The mortgage requires monthly payments over a 25-year period. Suppose that, at the end of the third year of the mortgage, the borrower makes a prepayment of $100,000. How much will the amortization period shortened? [4 Marks) Question 5: The current market price of a Walmart stock is $146.00. The company has a dividend yield of 1.5% and their dividend payout ratio (percentage of earnings that is distributed as dividends to the stockholders) is 60%. What was its earnings per share last year? [3 Marks]

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