A company is buying a new machine for $100,000. Bank credit is used to finance the entire amount at a rate of 10% per year. (Namely, the interest rate is 10% peryear on the unpaid balance (bakiye) of principal.) The company repay the debt in three years. Ple ase fill in the tables below according to three different payment plans. a PLAN 1 PLAN 1: Pay interest due at end of each year and principle at end of third year Balance Total paid back Interest for Period EOY Interest Principle paid back $100,000.00 1 $0.00 2 $0.00 3 $0.00 TOTAL AMOUNT PAID BACK: AN 2 PLAN 2: Pay principle and interestas a lump sum at end of third year EOY Balance Interest for Interest Principle Total paid back Period paid back $100,000.00 1 S0.00 $0.00 2 $0.00 $0.00 3 $0.00 TOTAL AMOUNT PAID BACK: b. PLAN 3: PLAN 3: Pay interest due at end of each year PLUS $25,000 principle payment at EOY 1,2,3. EOY Balance Interest for Principle Total paid back Interest Period paid back $100,000.00 $25,000.00 $25,000.00 2 3 $0.00 Windows'u TOTAL AMOUNT PAID BACK Windows'u etkin
A company is buying a new machine for $100,000. Bank credit is used to finance the entire amount at a rate of 10% per year. (Namely, the interest rate is 10% peryear on the unpaid balance (bakiye) of principal.) The company repay the debt in three years. Ple ase fill in the tables below according to three different payment plans. a PLAN 1 PLAN 1: Pay interest due at end of each year and principle at end of third year Balance Total paid back Interest for Period EOY Interest Principle paid back $100,000.00 1 $0.00 2 $0.00 3 $0.00 TOTAL AMOUNT PAID BACK: AN 2 PLAN 2: Pay principle and interestas a lump sum at end of third year EOY Balance Interest for Interest Principle Total paid back Period paid back $100,000.00 1 S0.00 $0.00 2 $0.00 $0.00 3 $0.00 TOTAL AMOUNT PAID BACK: b. PLAN 3: PLAN 3: Pay interest due at end of each year PLUS $25,000 principle payment at EOY 1,2,3. EOY Balance Interest for Principle Total paid back Interest Period paid back $100,000.00 $25,000.00 $25,000.00 2 3 $0.00 Windows'u TOTAL AMOUNT PAID BACK Windows'u etkin
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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