A friend of yours is interested in purchasing a motor vehicle with at a cost of $3.5 million. The bank has indicated that they are willing to finance 80% of the purchase price at a rate of 12% p.a. over 4 ½ years with equal monthly repayments. Your friend has asked you to Compute the required monthly payments. (round to the nearest dollar) Prepare the Loan amortization schedule for the first 4 months (round to the nearest dollar). Determine how much would be required to close the loan after 2 ½ years.

A friend of yours is interested in purchasing a motor vehicle with at a cost of $3.5 million. The bank has indicated that they are willing to finance 80% of the purchase price at a rate of 12% p.a. over 4 ½ years with equal monthly repayments. Your friend has asked you to Compute the required monthly payments. (round to the nearest dollar) Prepare the Loan amortization schedule for the first 4 months (round to the nearest dollar). Determine how much would be required to close the loan after 2 ½ years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

You borrowed $200,000 from the Bank of Nova Scotia. The loan is to be repaid at the end of five (5) years. The bank is to receive 8% interest on the loan balance that is outstanding. i. Calculate the yearly payment on a $200 000 loan. ii. Prepare an amortization schedule for this loan. iii. What is the loan balance just after the end of year two (2)? iv. What is the total interest paid over the life of the loan? v. What is the effective rate of interest on the loan if interest is compounded quarterly?
The Flemings secured a bank loan of $328,000 to help finance the purchase of a house. The bank charges interest at a rate of 2%/year on the unpaid balance, and interest computations are made at the end of each month. The Flemings have agreed to repay the loan in equal monthly installments over 25 years. What should be the size of each repayment if the loan is to be amortized at the end of the term? (Round your answer to the nearest cent.) %24
Complete an amortization schedule for the following loan. The loan amount is $100,000 at 3. 5 % interest, amortized on a yearly basis over five (5) years. (I have two calculators. A BA2Plus and a Qualifier Plus IIIfx. Please provide the proper key strokes.) Thank you!
The Magic Pumpkin Limousine Company wants to purchase a car telephone system for one of its automobiles. The telephone vendor has offered to finance the $1,500 purchase over one year in 12 installments, with a total of $140 in interest to be paid on the loan. Magic Pumpkin's bank has offered to finance the purchase with an instalment loan, where $155 in interest will be repaid and payments on the loan must be made quarterly. What are the annual interest rates on these loans?
Karim is planning to buy a new storage unit, which needs him to take a loan of 150000$ over a period of 6 years. the bank quotes a nominal interest of 7% for the first 3 years and a 9% for any remaining unpaid balance after the 3 years with both being compounded monthly. at these rates what is the equal monthly payment for 6 years required to repay it ?
The Fly-by-Night finance company advertises a “bargain 6%plan” for financing the purchase of automobiles. To the amount of the loan being financed, 6% is added for each year money is owed. This total is then divided by the number of months over which the payments are to be made, and the result is the amount of the monthly payments. For example, a woman purchases a $10,000 automobile under this plan and makes an initial cash payment of $2,500. She wishes to pay the $7,500 balance in 24 monthly payments: What effective annual rate of interest does she actually pay?
Troy Juth wants to purchase new dive equipment for Underwater Connection, his retail store in Colorado Springs. He was offered a $78,000 loan at 8.5% for 60 months. What is his monthly payment by table lookup? (Use Table 14.2) Note: Round your answer to the nearest cent. Monthly payment: TABLE 14.2 Loan amortization table (monthly payment per $1,000 to pay principal and interest on installment loan) Terms in months 7.50% 8.00% 8.50% 9.00% 10.00% 10.50% 11.00% 11.50% 12.00% 12.50% 13.00% 13.50% 14.00% 14.50% 15.00% 15.50% 16.00% 6 $ 170.34 $ 170.58 $ 170.83 $ 171.20 $ 171.56 $ 171.81 $ 172.05 $ 172.30 $ 172.55 $ 172.80 $ 173.04 $ 173.29 $ 173.54 $ 173.79 $ 174.03 $ 174.28 $ 174.53 12 86.76 86.99 87.22 87.46 87.92 88.15 88.38 88.62 88.85 89.08 89.32 89.55 89.79 90.02 90.26 90.49 90.73 18 58.92 59.15 59.37 59.60 60.06 60.29 60.52 60.75 60.98 61.21 61.45 61.68 61.92 62.15 62.38 62.62 62.86 24 45.00 45.23 45.46 45.69 46.14 46.38 46.61 46.84 47.07 47.31 47.54 47.78 48.01 48.25…
I need this question completed in 10 minutes in handwritten working out
You are purchasing a home for $340,000. The down payment is 25% and the balance will be financed with a 25-year mortgage at 8% and 1 discount points. You put down a deposit of $10,000 (applied to the down payment) when the sales contract was signed. You also have these expenses: credit report, $80; appraisal fee, $140; title insurance premium, 1% of amount financed; title search, $300; and attorney's fees, $850. Find your amount due at the closing. $340,000 $81,470 $81,170 $57,655
You are considering purchasing a lot adjacentto your laundry business to provide adequate parking space for your customers. You need to borrow$75,000 to secure the lot. You have made a deal with alocal bank to pay the loan back over a five-year periodwith the following payment terms: 14%, 20%, 26%,32%, and 38% of the initial loan at the end of first,second, third, fourth, and fifth years, respectively.(a) What rate of interest is the bank earning fromthis loan?(b) What would be the total interest paid over thefive-year period?
Please provide your complete solutions to the given problems. You may use MS Excel for your solutions. 1. A loan is to be amortized for 4 years through equal payments of PhP48,532.49 at the end of every 6- month period. If the loan earns interest at 7% compounded semi-annually, create an amortization schedule and find: a. the present value of the loan b. the outstanding principal after 3 years c. the amount of principal already paid after 3 years (sum of the principal repayment column for the first 3 years) d. the total interest paid on this loan (sum of the interest column)
A local finance company quotes a 17 percent interest rate on one-year loans. So, if you borrow $30,000, the interest for the year will be $5,100. Because you must repay a total of $35,100 in one year, the finance company requires you to pay $35,100/12, or $2,925.00, per month over the next 12 months. a. What rate would legally have to be quoted? b. What is the effective annual rate?