A company borrowed at 7.21% compounded annually to purchase equipment, agreeing to make payments of $2,020 at the end of every three months for 16 payments. (a) What is the equivalent cash price of the equipment? (b) How much will be owed at the end of two years? (c) How much of the principal will be repaid within the first two years? (d) How much interest is paid during the first two years? (a) The cash price of the equipment is S. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

A company borrowed at 7.21% compounded annually to purchase equipment, agreeing to make payments of $2,020 at the end of every three months for 16 payments. (a) What is the equivalent cash price of the equipment? (b) How much will be owed at the end of two years? (c) How much of the principal will be repaid within the first two years? (d) How much interest is paid during the first two years? (a) The cash price of the equipment is S. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The Superior Tool Company is repaying a debt of $16,000 by payments of $1000 made at the end of every three months. Interest is 7.5% compounded monthly. (a) How many payments are needed to repay the debt? (b) What is the size of the final payment? (a) The number of payments to be made is (Round up to the nearest whole number.)
ABC Inc. asked your company for a 7-year loan of $50,000. The repayment of the loan will be as follows: ABC will pay $5,000 at the end of Year 1, $10,000 at the end of Year 2, and $15,000 at the end of Year 3, and fixed unspecified cash flow (assume X) at the end of each of the following years (Year 4 through Year 7). Assuming 8% as an appropriate rate of return on low risk but an illiquid 7-year loan. Find out the cash flow that this investment must provide at the end of each of the final 4 years (year 4 to year 7), that is, find out the X?
A company borrowed at 7 42% compounded monthly to purchase equipment, agreeing to make payments of $2,900 at the end of every three months for 17 payments (a) What is the equivalent cash price of the equipment? (b) How much will be owed at the end of two years? (c) How much of the principal will be repaid within the first two years? (d) How much interest is paid during the first two years? CHE
Ten annual payments at an interest rate of 7% are made to repay a loan of $9000. Build the table that shows the balance due, principal payment, and interest payment for each payment. What is the annual payment? What interest is paid in the last year
A deposit of $5,000 per year is done starting at year 1 for 5 years. The sum of $60,000 is required to be withdrawn by the end of year 10. How much should be deposited every year for the following 5 years (i.e. years 6-10) for the required amount to be available at the end of year 10? Assume the interest rate to be 10%.
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:A company borrowed (100000$) from a bank and decided to repay this dept by a series payments (payment every 6 months for 5 years). The bank put a condition about the payment that every payment should increase by (1000$) each time. If the interest rate is (% 9) compounded quarterly, determine the amount of each payment?
Corporation borrowed $80,000.00 at 11% compounded semi-annually for 14 years to buy a warehouse. Equal payments are made at the end of every 6 months. (a) Determine the size of the semi-annualpayments. (b) Compute the interest included in payment 9. (c) Determine the principal repaid in payment period 6. (d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals.
Tricana Corporation borrowed $80,000.00 at 4% compounded quarterly for 9 years to buy a warehouse. Equal payments are made at the end of every 3 months. (a) (b) (c) (d) Determine the size of the quarterly payments. Compute the interest included in payment 16. Determine the principal repaid in payment period 11. Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals. (a) The size of the quarterly payment is S (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The interest included in payment 16 is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (c) The principal repaid in payment period 11 is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (d) Complete the table below for the first three payments in the…
A company receives a 5-year $100 million loan commitment from Wells Fargo at a fixed rate of 4.5%. The up-front commitment fee is 40 basis points and the unused portion of the loan is charged 15 basis points. The bank borrows a total of $45 million at the beginning of the year and none thereafter. The following is true, except: A The interest paid on the drawdown amount for the full year is $2,025,000. B The interest rate paid on the drawdown amount for the full year is 4.90% C The fee for the loan commitment for the full year is $400,000. D The fee for the unused portion of the loan commitment for the full year is $82,500
A $560,000 townhome in Richmond Hill was purchased with a down payment of 20% of the amount. A 20-year mortgage was taken for the balance. The negotiated fixed interest rate was 5.25% compounded semi-annually for a three-year term with repayments made at the end of every month. a. What is the size of the monthly payment? Round to the nearest cent b. What was the principal balance at the end of the three-year term? Round to the nearest cent c. By how much did the amortization period shorten if the size of the periodic payments were increased by 15% starting from the 37th payment? Assume the same interest rate. months
South Penn Tracking is financing a new truck with a loan of $10,000 to be repaid in 5 annual end-of-year installments of $2,504.56. What annual interest rate is the company paying?

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