Campus Flights takes out a bank loan in the amount of $200,500 on March 1. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 8%, recognized on December 31. (Round answers to the nearest whole dollar if needed.) Compute the interest recognized as of December 31 in year 1 rounded to the whole dollar. Compute the principal due in year 1.     Loan= $200.500 Interest=8% Period=10 1) Interest Amount  200,500  x 8% x 10/12= 13,367 I WOULD LIKE TO KNOW HOW IT IS CALCULATED OR HOW THESE NUMBERS COME OUT, THANK YOU 2)  r=8%, n=10 =6,71 (200,500/6.71)-(200,500x8%)= 13840 200,500-13,840=186,660 Dollar

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 1EA: Campus Flights takes out a bank loan in the amount of $200,500 on March 1. The terms of the loan...
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  1. Campus Flights takes out a bank loan in the amount of $200,500 on March 1. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 8%, recognized on December 31. (Round answers to the nearest whole dollar if needed.)
    1. Compute the interest recognized as of December 31 in year 1 rounded to the whole dollar.
    2. Compute the principal due in year 1.

 

 

Loan= $200.500

Interest=8%

Period=10

1) Interest Amount  200,500  x 8% x 10/12= 13,367

I WOULD LIKE TO KNOW HOW IT IS CALCULATED OR HOW THESE NUMBERS COME OUT, THANK YOU

2)  r=8%, n=10 =6,71

(200,500/6.71)-(200,500x8%)= 13840

200,500-13,840=186,660 Dollar

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