Canliss Mining Company borrowed money from a local bank. The note the company signed requires five annual installment payments of $10,500 beginning one year from today. The interest rate on the note is 5%.(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What amount did Canliss borrow? (Round your final answers to nearest whole dollar amount.) Table or calculator function: Payment: n = Present Value:
Canliss Mining Company borrowed money from a local bank. The note the company signed requires five annual installment payments of $10,500 beginning one year from today. The interest rate on the note is 5%.(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What amount did Canliss borrow? (Round your final answers to nearest whole dollar amount.) Table or calculator function: Payment: n = 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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Question
8.
Transcribed Image Text:Canliss Mining Company borrowed money from a local bank. The note the company signed requires five annual installment payments
of $10,500 beginning one year from today. The interest rate on the note is 5%.(FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and
PVAD of $1) (Use appropriate factor(s) from the tables provided.)
What amount did Canliss borrow? (Round your final answers to nearest whole dollar amount.)
Table or calculator function:
Payment:
n =
Present Value:
Expert Solution
Step 1 Explanation
The present value of the installments can be calculated using PV or Present value function in excel.
PV = (RATE, NPER, -PMT, FV, TYPE)
RATE = Periodic interest rate
NPER = Compounding periods
PMT = Periodic installment
FV or Future value is not applicable
TYPE denotes the timing of payment whether beginning or end of period. (Use "0" for end and "1" for beginning)
Note: As the payment occurs 1 year from today this means that the payment occurs at the end of the compounding period.
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