A company borrowed $100,000 from a local bank. The loan requires 10 equal annual payments beginning one year from today. Assume an interest rate of 8%. What is the amount of each annual payment? table, calculator function, or excel payment n j present value

A company borrowed $100,000 from a local bank. The loan requires 10 equal annual payments beginning one year from today. Assume an interest rate of 8%. What is the amount of each annual payment? table, calculator function, or excel payment n j present value

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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Data Back-Up Systems has obtained a $29,000, 90-day bank loan at an annual interest rate of 15%, payable at maturity. (Note: Assume a 365-day year.) a. How much interest (in dollars) will the firm pay on the 90-day loan? b. Find the 90-day rate on the loan. c. Annualize your result in part b to find the effective annual rate for this loan, assuming that it is rolled over every 90 days throughout the year under the same terms and circumstances. Answers a. The amount of interest on the loan is $___. (Round to the nearest cent.) b. The effective 90-day rate is___%. (Round to two decimal places.) c. The effective annual rate is___%. (Round to two decimal places.)
Acme Industries Ltd. borrowed $50,000 and amortized the loan over 10 years at a rate of j1=8.00%. They will make monthly payments on the loan. a) Calculate the monthly loan payment rounded UP to the next cent: b) What is the balance owing on the loan after 3 years?
A bank features a savings account that has an annual percentage rate of r=3.4% with interest compounded weekly. Alfonso deposits $11,500 into the account. The account balance can be modeled by the exponential formula S(t)=P(1+r/n)^nt, where S is the future value, P is the present value, rr is the annual percentage rate, nn is the number of times each year that the interest is compounded, and tt is the time in years. What values should be used for P, r, and n?P= , r= , n= How much money will Alfonso have in the account in 10 years?Answer = $ .Round answer to the nearest penny. What is the effective annual rate for the savings account?effective rate = %.Round answer to 3 decimal places.
A bank made a farmer a loan of $1,000 at 16% for three years compounded annually. Find the future value and the compound interest paid on the loan. Compare the compound interest with simple interest for the same period. Future value=$ (Round to the nearest cent as needed.)
What amount must be deposited at the bank today to grow to $600 in 4 years, assuming 10% interest compounded semiannually? Please identify which table you used.
Find the accumulated amount A if the principal P is invested at the interest rate of r/year for t years. (Use a 365-day year. Round your answer to the nearest cent.) P = $120,000, r = 2.75%, t = 4, compounded daily
You borrowed some money at 8 percent per annum. You repay the loan by making three annual payments of $163 (first payment made at t = 1), followed by five annual payments of $452, followed by four annual payments of $709. How much did you borrow? Round your answer to 2 decimal places: record your answer without commas and without a dollar sign. Your Answer: Answer
Suppose you invest $1,250 in an account paying 8% interest per year. a. What is the balance in the account after 3years? How much of this balance corresponds to "interest on interest"? b. What is the balance in the account after 31 years? How much of this balance corresponds to "interest on interest"?
A loan of £10,000 is repaid in 10 annual instalments of £1,300, with the first repayment due in one year. What is the interest rate? % Enter a percentage correct to 1 decimal place.
Halep Inc. borrowed $39,070 from Davis Bank and signed a 1-year note payable stating the interest rate was 8% compounded annually. 1. Using the Present Value of an Annuity of 1 TABLE4 or Figure B2 in the textbook E, calculate the factor. 2. Next, determine the annual payment amount. 3. Then, determine the interest portion of the payment for year 1. 4. Finally, determine the principal portion of the payment for year 1. Round to the nearest penny, two decimal places.
Suppose you secure a home improvement loan in the amount of $5,000 from a local bank. The loan officer gives you the following loan terms:• Contract amount = $5,000• Contract period = 24 months• Annual percentage rate = 12%• Monthly installment = $235 .37Shown is the cash flow diagram for this loan. Construct the loan payment schedule by showing the remaining balance, interest payment, and principal payment at the end of each period over the life of the loan.
= A bank features a savings account that has an annual percentage rate of r interest compounded quarterly. Tatiana deposits $9,000 into the account. The account balance can be modeled by the exponential formula A(t) = a (1 + 7-)kt, where A is account value after t years, a is the principal (starting amount), r is the annual percentage rate, k is the number of times each year that the interest is compounded. (A) What values should be used for a, r, and k? a = r = 5.6% with k = (B) How much money will Tatiana have in the account in 7 years? Answer = $ 7. Round answer to the nearest penny. APY = = %. Round answer to 3 decimal places. (C) What is the annual percentage yield (APY) for the savings account? (The APY is the actual or effective annual percentage rate which includes all compounding in the year).

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