1.If a company borrows $250,000 for four years at 9%, what would the annual loan payments be?If a company borrows $750,000 for six years at 12%, what would the annual loan payments be?2.Calculate the annual payment, finance costs, and principal repayments on a $400,000loan with a 8% interest rate over four years.3.During the next four months, a furniture manufacturer will be entering its holidayseason. Management expects commercial trade receivables to reach $600,000 andwill be seeking a bank loan that will finance 40% of the receivables. The bank charges10% and an additional 1% service fee of the pledged trade receivables. The averagecollection period is 45 days. Calculate the company's APR for the pledged tradereceivables.

1) Borrowed amount (B) = $250000 r = 9% n = 4 years Let the annual loan payments = A

Answered: 1. If a company borrows $250,000 for…

1. If a company borrows $250,000 for four years at 9%, what would the annual loan payme nts be? If a company borows $750,000 for six years at 12%, what would the annual loan payme nts be?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 17P

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Question

1.
If a company borrows $250,000 for four years at 9%, what would the annual loan payme
nts be?
If a company borrows $750,000 for six years at 12%, what would the annual loan payme
nts be?
2.
Calculate the annual payment, finance costs, and principal repayments on a $400,000
loan with a 8% interest rate over four years.
3.
During the next four months, a furniture manufacturer will be entering its holiday
season. Management expects commercial trade receivables to reach $600,000 and
will be seeking a bank loan that will finance 40% of the receivables. The bank charges
10% and an additional 1% service fee of the pledged trade receivables. The average
collection period is 45 days. Calculate the company's APR for the pledged trade
receivables.

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