A bank loaned John Smith 53,000 for three years compounded annually at table or the future value and compound interest formula. How much interest was John required to pay on the loan? Use the $1 uture value

A bank loaned John Smith 53,000 for three years compounded annually at table or the future value and compound interest formula. How much interest was John required to pay on the loan? Use the $1 uture value

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: a. How many payments are required to repay the loan? Number of payments b. Use the given information…

A: Amortization is the process of gradually repaying the loan. In an amortizing loan, a portion of each…

Q: Pedro borrows P300,000.00 from lender ABC today at 12% compounded monthly. To fulfill his obligation…

A: As you have asked a question with multiple parts, we will solve the first 3 parts as per policy of…

Q: Jada and Izaak borrowed $40,000 at 5.53% compounded quarterly as a second mortgage loan against…

A: A loan refers to a contract between a lender and a borrower where a sum is exchanged on the promise…

Q: As one of the loan officers for Grove Gate Bank, calculate the monthly principal and interest, PI…

A: A loan is a sum of money that one or more individuals, businesses, or other organisations acquire…

Q: Find the monthly payment (in $) and the total interest (in $) for a mortgage of $46,000 at 5 1/4 %…

A: Monthly payment=4.14Total interest=$42,987.20So, the monthly payment is $4.14 and the total interest…

Q: A debtor borrows P7,900 and agrees to pay P9,359 for his debt 3 years & 4 months from now. At what…

A: Given, Future value = FV = P9,359 Present value = PV = P7,900 Number of months = t = 3years 4 months…

Q: Investigate the effect of the interest rate on home loans by finding the monthly payment and the…

A: Data Given, Loan Amount (Principle) = $150000 Time period of loan (n)= 20 years Payment Interval =…

Q: Determine whether the scenario below represents an annuity. In at least one complete sentence,…

A: Annuity is fixed amount of money paid at a regular interval. The amount given in the question is not…

Q: Find the monthly payment (in $) and the total interest (in $) for a mortgage of $48,000 at 5 1/4%…

A: The monthly payment for a mortgage is made is such a way that the mortgage amortizes to zero by the…

Q: A person agreed with a bank to deposit an amount of 500 dinars at the end of each year starting from…

A: The compound value of money can be depicted as the amount of interest generated on interest earned…

Q: Use the ordinary interest method to compute the time (in years) for the loan. Round your answer up…

A: Principal (P) = $25,000Rate (R) = 8.6%Interest (I) = $10,750

Q: José borrowed 8100 at 5 1/2% for three years compounded, semi am annually. What is the future…

A: Future value is the value of an investment or cash flow at a future point in time, based on the…

Q: 5. Jim Jones bought a house for monthly mortgage payments of $600.00 for twenty years. If interest…

A: Note: Since you have asked multiple questions, we will solve the first question for you. If you want…

Q: An individual is purchasing a $15,000 automobile, which is to be paid for in 48 monthly installments…

Q: Complete the following amortization chart. (Round your answers to the nearest cent.) selling…

A: Selling price = $ 86000 Down payment = $ 5000 Principal loan (PV) = 86000-5000 = $ 81000 Rate of…

Q: Find the monthly house payments necessary to amortize the following loan. Then calculate the total…

A: 1). Monthly payment is calculated using following equation Monthly payment = A×(r/m)(1-1(1+r/m)n×m)…

Q: Peter just borrowed a $50,000 business loan from the bank at 5% annual interest. He must repay the…

A: Given, Loan borrowed is $50,000 Interest rate is 5% Term of loan is 5 years.

Q: Ibrahim has a mortgage of $429,000 through his bank for property purchased. The loan is repaid by…

A: Any sum borrowed to meet any specific personal or business needs is regarded as a mortgage/loan. The…

Q: Tom Bond borrowed $6,200 at 6-% for three years compounded annually. What is the compound amount of…

A: Compound amount = Principal(1 + Rate/100)t Interest = Compound amount - Principal

Q: Complete the following amortization chart by using Table 15.1. Note: Round your "Payment per…

A: An amortized loan is a loan that is repaid slowly with a monthly payment comprising both principal…

Q: Suppose that you have borrowed 5,000,000 from a bank with 5% interest rate for 4 years. Show the…

A: The question is based on the concept to calculate principal and interest on the loan amount in…

Q: Pedro, who deposited P500,000.00 today with a financial Institution M, agreed with the latter that…

A: Initial deposit (I) = P500,000.00 Annual interest rate = 0.08 Monthly period (n) = 14 months Value…

Q: The following loan is a simple interest amortized loan with monthly payments. $155,000, 9%, 30 years…

A: Given, The loan amount is $155,000 Number of years (t) is 30 years Rate of interest is 9.5%

Q: If James deposits $2,000.00 in a fixed deposit for 1 year, what will be the difference in the…

A: Simple interest is based only on the principal amount. On the other hand, compound interest is based…

Q: Engr. Tongol borrowed money from a loan shark. He receives from the loan shark an amount of P…

A: Simple interest = Amount borrowed * Interest rate * (Number of months / 12)

Q: If Greg borrows $140.00 from the bank at 6.5% exact simple interest, how much interest does Greg owe…

A: The simple interest can be computed using the principal amount, the time period, and the interest…

Q: tained a loan from the bank worth P 400,000.00 payable within 4 years from the time the loan was…

A: The given problem can be solved using PMT function in excel. PMT function computes installment…

Q: Mr. Herymann bought a house for Rp. 500 million on credit for 5 years. Bank BNI offers mortgages…

A: Mortgages: When a house is purchased on credit, the home buyer is required to contribute a certain…

Q: A bank made a farmer loan of 1000 at 14% for three years compounded annually. Find the future value…

A: Loan amount = 1000 Interest rate = 14% compounded annually Period = 3 years

Q: Find the monthly house payments nessary to amortize the following loan. Find total payments and…

A: Loans can be secured and unsecured. The loan is the amount borrower takes from the bank or financial…

Q: A person borrowed a loan and pledged to repay it and its interest using the amortization method, out…

A: The present value of the annuity should be used here since the payment is made at regular intervals…

Q: Sue borrows $600,000 at 3.85%. The mortgage is for 30 years. A. What is the monthly payment? B. How…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: The problem describes a debt to be amortized. (Round your answers to the nearest cent.) A man buys…

A: Loans are to be paid by the periodic payments that carry the payment for the principal amount and…

Q: The problem describes a debt to be amortized. (Round your answers to the nearest cent.) A man buys…

A: Using excel PMT function to calculate size of each payment.

Q: Jerome borrowed 5200 at 8 1/2% for six years compounded semi annually. What is the future value of…

A: Future value is the value of an investment or cash flow at a future point in time, based on the…

Q: An accounting firm agrees to purchase a computer for $180,000 (cash on delivery) and the delivery…

A: An annuity refers to a financial product or arrangement in which a series of fixed payments or…

Q: Use the appropriate formula located on Illustration 10-1 on page 209 to solve the problem. Bob…

A: Given: Semi-annual contribution : $5,000 Annual Interest Rate: 6% Compounding: Semi-Annual Number of…

Q: A family has an $80,000, 20-year loan at 8% compounded monthly. (a) if the monthly payment is…

A: A loan is an amount of borrowing that an individual or a corporation has taken from a bank or a…

Q: On a $529, 000 home, on a 30- year fixed mortgage, with an interest rate of 5.29, find: a. The down…

A: Home cost = $529,000Number of years = 30 yearsInterest rate = 5.29%

Question

A bank loaned John Smith $3,000 for three years compounded annually at 9%. How much interest was John required to pay on the loan? Use the $1.00 future value
table or the future value and compound interest formula.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Gunther has to pay a loan he took out after a term of 5 years. If the principal amount is at $215 000 and the total amount he has to pay is $275 000, what was the interest rate of his loan (if compounded quarterly)?
The problem describes a debt to be amortized. (Round your answers to the nearest cent.)A man buys a house for $330,000. He makes a $150,000 down payment and amortizes the rest of the purchase price with semiannual payments over the next 9 years. The interest rate on the debt is 10%, compounded semiannually. (a) Find the size of each payment.$ (b) Find the total amount paid for the purchase.$ (c) Find the total interest paid over the life of the loan.$
Tom Bond borrowed $6,600 at 6-% for three years compounded annually. What is the compound amount of the loan and how much interest will he pay on the loan? Compound amount = $ (Round to the nearest cent as needed.) Compound interest = $ (Round to the nearest cent as needed.)
Desidero Garcia got a simple interest amortized loan for $20,000 at 7 3/8 % for five and half years. Find the monthly payment and the total interest that will be paid.
1. Mr. Pat Met invested in a bank having an annual payment of Php 100,000 for three years at a 4% annual interest rate. a. How much is the future value? b. Find the total interest earned on the investment.
Vincent Madrigal secured a certificate of deposit for 7 years amounting to USD100,000 at 4% interest rate compounded monthly. How much will she receive(principal plus compound interest) after the date of maturity? Topic: Principle of Finance
Tom Bond borrowed $6,800 at 8-% for three years compounded annually. What is the compound amount of the loan and how much interest will he pay on the loan? Compound amount = $ (Round to the nearest cent as needed.)
A bank loans a family $90,000 at 8% annual interest rate to purchase a house. The familyagrees to pay the loan off by making semiannual payments over a 25 year period. Howmuch should the semiannual payment be in order to pay off the debt in 25 years?
Please help complete in the same format.
An accounting firm agrees to purchase a computer for $130,000 (cash on delivery) and the delivery date is in 270 days. How much do the owners need to deposit in an account paying 0.55%compounded quarterly so that they will have $130,000 in 270 days? (a) State the type. sinking fundamortization ordinary annuitypresent valuefuture value (b) Answer the question. (Round your answer to the nearest cent.)