Financial Management - Rio Tinto Limited (RIO) is Engaged in Minerals - Finance Management Assignment Help

Assignment Task

Question 1.
Rio Tinto Limited (RIO) is engaged in minerals and metals exploration, development, production and processing. The Company's Portfolio of assets is condensed into four product groups: Aluminium, Copper & Diamonds, Energy &Minerals and Iron Ore. As we have discussed  in Topic 1, agency problem can be a key concern for shareholders.  Discuss the agency problem in relation to RIO.

Question 2.
You plan to borrow $1,000,000 for buying a house. You have decided to go with Bank XYZ which offers you an interest rate of 2.68% with daily compounding.
1)  What is the effect interest rate? What is the nominal rate with monthly compounding? Explain briefly the difference between the effective interest rate and the  nominal interest rate.
2) Assume that you pay for the loan over 30 years and you make an equal payment at the end of each month. What will be the monthly payment?
3) Assume that you have made the regular payments as planed and the interest rates have not changed over the first 15 years, how much would you owe the bank after 15 years?
4) Suppose that you are can make the following deal with the Bank XYZ: you pay for the loan over 30 years and you make an equal payment at the end of every two months. What will be the bi-monthly payment?

Q2 Notes:
1. For a high mark for this question, I would expect you to present your solution logically and clearly.  
2. Your response must be typed properly in Word document. You need to explain your solution method (e.g. annuity, perpetuity, time-line etc ),  the input parameters and how you did the calculation (e.g. the Excel functions you use).
3. Your response should be concise.  There is no need to show your excel spreadsheet.

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