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10,000 5,961 4,039 45,638 10,000 5,477 4,523 41,114 10,000 4,934 5,066 36,048 6. 10,000 4,326 5,674 30,373 7 10,000 3,645 6,355 24,018 10,000 2,882 7,118 16,901 9. 10,000 ? ? 10 10,000 ? What is the effective annual interest rate? 1. A) 9%. 2. B) 10%. 3. C) 11%. 4. D) 12%. O A O B OD

10,000 5,961 4,039 45,638 10,000 5,477 4,523 41,114 10,000 4,934 5,066 36,048 6. 10,000 4,326 5,674 30,373 7 10,000 3,645 6,355 24,018 10,000 2,882 7,118 16,901 9. 10,000 ? ? 10 10,000 ? What is the effective annual interest rate? 1. A) 9%. 2. B) 10%. 3. C) 11%. 4. D) 12%. O A O B OD

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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3 10,000 5,961 4,039 45,638 10,000 5,477 4,523 41,114 10,000 4,934 5,066 36,048 10,000 4,326 5,674 30,373 7 10,000 3,645 6,355 24,018 8. 10,000 2,882 7,118 16,901 9 10,000 10 10,000 ? What is the effective annual interest rate? 1. A) 9%. 2. B) 10%. 3. C) 11%. 4. D) 12%. O A O B O D
Transcribed Image Text:3 10,000 5,961 4,039 45,638 10,000 5,477 4,523 41,114 10,000 4,934 5,066 36,048 10,000 4,326 5,674 30,373 7 10,000 3,645 6,355 24,018 8. 10,000 2,882 7,118 16,901 9 10,000 10 10,000 ? What is the effective annual interest rate? 1. A) 9%. 2. B) 10%. 3. C) 11%. 4. D) 12%. O A O B O D
Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Cash Effective Decrease Outstanding Payment Payment Interest in balance Balance 63,282 1 10,000 10,000 53,282 10,000 6,394 3,606 49,676 3. 10,000 5,961 4,039 45,638 10,000 5,477 4,523 41,114 10,000 4,934 5,066 36,048 6. 10,000 4,326 5,674 30,373 7 10,000 3,645 6,355 24,018 10,000 2,882 7,118 16,901
Transcribed Image Text:Refer to the following lease amortization schedule. The 10 payments are made annually starting with the beginning of the lease. Title does not transfer to the lessee and there is no purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable. Cash Effective Decrease Outstanding Payment Payment Interest in balance Balance 63,282 1 10,000 10,000 53,282 10,000 6,394 3,606 49,676 3. 10,000 5,961 4,039 45,638 10,000 5,477 4,523 41,114 10,000 4,934 5,066 36,048 6. 10,000 4,326 5,674 30,373 7 10,000 3,645 6,355 24,018 10,000 2,882 7,118 16,901
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Effective annual interest rate = 6394/53282= 12%
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