A bank gives a loan to a company to purchase equipment which is worth of Tk.1250000 at an interest rate of 11.5% compounded annually. This amount should be repaid in 12 yearly equal installments. Find the installment amount that the company has to pay the bank. Also Draw the cash flow diagram

Q: A man borrowed ₱180 000 from a bank payable in two years. The bank discounted the loan by ₱30 000.…

A: Theoretical interest rate is an interest rate which is calculated on amount borrowed whereas actual…

Q: ABC Corporation has a daily collection of 180,000 from a selected foreign customer group. The bank…

A: The difference between cash inflows and the initial investment is defined as NPV. NPV is used to…

Q: You have just received a bonus of $10,000 and are looking to deposit the money in a bank account for…

A: Value after a period can be calculated as: = Principal * (1 + Periodic Interest rate)^number of…

Q: A bank offers all savings accounts 5% interest compounded annually. If one account has a principal…

A: An account doubles when the present value becomes 2 times of itself. In order to become two times,…

Q: How much do you have to deposit now with a second deposit in the amount of $700 at the end of the…

A: Second deposit at the end of first year is $700  Amount withdraw at the end of year 2 to 4 is $150…

Q: A debt of RM480 was repaid with a check for RM498. If the interest rate was  7.5%, for how long was…

A: Debt = 480 Repayment = 498 Interest Rate = 7.5%

Q: Suppose that a person deposits $2500 in a savings account at the end of each year for the next 15…

A: Here, Annual Deposits is $2,500 Interest Rate is 8% Compounding Period is Daily i.e. 365 Payment…

Q: An amount of 50,000 was borrowed at an interest rate of 10% per year and was to be repaid over a…

A: Loan amount (L) = 50000 r = 10% Let CFn be the payment in year n. Let size of first payment = X CF1…

Q: Q6. Suppose you deposit $290,000 into an account that pays 5% interest compounded annually. If you…

A: Annuity refers to the payment series of same nominal value which are paid or received at a same…

Q: WHAT AMOUT SHOULD BE RECOGNIZED?  Paid cash of P200,000 and issued a note for the purchase of a…

A: Note means an instrument acknowledging as debt due from one party to another party. It carry defined…

Q: What lump sum of money must be deposited into a bank account at the present time so that $500…

A: Monthly withdrawals six years from now is $500 Time period of withdrawal is 5 years interest rate…

Q: You were considcring depositing your savings in one of three banks, all of which pay 7% interest;…

A: Bank Capital interest rate = 7% annually compounded Bank Daisani interest rate = 7% semiannually…

Q: Solve for the amount of money that the bank can lend, given the reserves that are legally required…

A: Banks require to maintain the portion of the deposits into the safe custody which are required to be…

Q: A bank features a savings account that has an annual percentage rate of r=3.1r=3.1% with interest…

A: Present value of deposit grow with amount of interest and period of deposit and grow to much larger…

Q: Bank A pays 10% interest compounded annually on deposits, while Bank B pays 9% compounded daily.…

A: Bank A interest = 10% annually compounded Bank B interest = 9% daily compounded (365 days of…

Q: attach complete solution for full credit and draw the cash flow diagram. Box your final answer/s.

A: Compound interest is interest on principal + interest on accumulated interests.

Q: A bank makes a loan of $1,000,000 at a rate of 6% p.a. It also requires a compensating balance of…

A: A loan indicates the sum borrowed to meet some personal or business needs. The lender generally…

Q: Bank A pays 7% simple interest on its savings account balances. Bank B pays 5.5% interest compounded…

A: STEP 1 Simple interest is the amount of interest charged on a specific principal amount at a…

Q: Only cash flow diagram, I am not asking you to answer the problem just show me the correct cash flow…

A: Future value refers to the worth of a certain asset in the future date. Formula= PV(1+r)n

Q: 1) You are about to borrow $12,000 from a bank at an interest rate of 10% compounded annually. You…

A: To solve this problem, we can use the formula for the equal annual payment on a loan, known as an…

Q: A man deposited P5,000 in a bank at a rate of 10% per annum for 9months and 25days. Find the…

A: Future value of deposits is the sum of all the deposits compounded using the provided discount rate.

Q: 1. Find the difference between the simple interest and compound interest on a savings account…

A: Simple Interest and Compound Interest   Calculating the interest above the principal amount is known…

Q: Bridgette Inc. maintains a cash buffer for unexpected cash outlays for the year amounting to 3,000.…

A: Unexpected annual cash outlay is 3,000 Transaction cost per transaction is P15 Annual interest rate…

Q: Find the equivalent present worth of the cash receipts in the accompanying diagram, where i = 8%…

A: We know that the formula to calculate the present value is I/(1+i)n, where I is the cash flow that…

Q: Make the cash flow diagram and solve: What is the maximum amount that can be loaned at 5 percent…

A: Interest rate = 5℅ Year Payment 1 500.00 2 1000.00 3 1500.00 4 2000.00 5 2500.00

Q: A bank lends some money to a business. The business will pay the bank a single payment of $180,000…

A: The present value function can be used to derive the present value of a future sum or the present…

Q: A bank loan of P6,000,000 at 10% pa, is to be paid in 10 equal payments, the first of which to be…

A: Loan = 6,000,000 Interest rate = 10% p.a. Number of annual payments = 10 First loan payment starts…

Q: Bank A just received total deposit equal to $30,700,000.00. Required reserve ratio for the banking…

A: The Reserve ratio is basically the percentage amount of reserves that a bank should maintain to meet…

Q: Assume that Bank M is the only commercial bank in the country with zero excess reserve and its legal…

A: Being the only commercial bank in the country means the whole cycle of credit money creation, until…

Q: Mama Inc. maintains a cash buffer for unexpected cash outlays for the year amounting to 3,000. Bank…

A: Cash is required in all business activities and at all levels. Therefore, cash is an inseparable…

Q: What amount of money must invert in a bank that pay the 25 % annual, capitalizable monthly, with the…

A: Given: Value of money at the end (FV) = $3,000,000 Annual interest rate = 25% Compounding periods…

Q: Y Corporation has daily collections of P180,000 from a selected foreign customer group. The bank…

A: Solution Given Amount 130000 Current clearing time 8 days Reduced clearing time 3…

Q: 1. A company employee loans P100,000 from a bank with interest at 8% compounded quarterly. He then…

A: Loan Amount = 100,000 Quarterly Compounding Interest Rate = 8%/4 = 2% per quarter 6 equal quarterly…

Q: H1. A bank bill with a face value of $250,000 was issued today and it matures in 60 days' time.…

A: Present value is referred to as the current value of the future sum of the funds/cash flows stream…

Q: A bank bill with a face value of $250,000 was issued today and it matures in 60 days' time. If…

A: Present value is referred to as the current value of the future sum of the funds/cash flows stream…

Q: Suppose you deposit $100 in a bank, which of the following will occur A The bank's assets will…

A: Bank account refers to the account maintained for the purpose of saving money in the bank and a…

Q: If you make yearly deposits of $1200 in a bank account, how much money will you have in your account…

A: Future value of annuity = P * [ (1+r)^n  - 1 ] /r  Where r = rate of interest i.e. 6% n = no. of…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.