Exercise B-13 (Algo) Present value of an amount and of an annuity LO P1, P3Compute the amount that can be borrowed under each of the following circumstances: (PV of $1, FV of $1, PVA of $1, and FVA of $1)(Use appropriate factor(s) from the tables provided. Round your "Table value" to 4 decimal places.)1. A promise to repay $98,000 three years from now at an interest rate of 7%.2. An agreement to make three separate annual payments of $16,000, with the first payment occurring 1 year from now. The annualinterest rate is 2%.Option 1Loan amountOption 2Annual paymentsTable ValueTable ValueAmountAmount$Present ValuePresent Value00

An annuity is used in case of a future annuity – suppose an equal sum of money is invested in the…

Answered: Compute the amount that can be borrowed…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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David would like to make a single payment of $2000 at the end of year 7 so that it will be equivalent to payments of $100, $1000, and $900 made at the ends of years 1, 12, and X years, respectively. Assuming an effective rate of interest of 5% per annum and the method of equated time, solve for X. Round your answer to 2 decimal places.
If $1000 is deposited at the end of each year for 5 years into an ordinary annuity earning 8.99% compounded annually, construct a balance sheet showing the interest earned during each year and the balance at the end of each year. Complete the balance sheet. Period Amount Interest Balance 1 $1000.00 2 $1000.00 3 $1000.00 4 $1000.00 $ $4 $1000.00 $4 $ (Round to the nearest cent as needed.)
You have taken a loan of $84, 000.00 for 25 years at 5.5% compounded quarterly. Fill in the table below: (Round all answers to 2 decimal places.) \table[[Payment number, Payment amount, Principal Amount, Interest, Balance.], [0),... S 84,000.00,1,1), vdots....S.
On January 1, a company agrees to pay $28,000 in nine years. If the annual interest rate is 3%, determine how much cash the company can borrow with this agreement. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.)
A loan of X is repaid with level payments of R payable at the end of each year for n years. You are given: (i) The interest paid in year 1 is 797.50. (ii) The principal repaid in year n-4 is 865. (iii) The principal outstanding at the end of year n-1 is 1,144.50. Determine X. A B с D E 9,500 10,000 10,500 11,000 11,500
Assume that Sonic Foundry Corporation has a contractual debt outstanding. Sonic has available two means of settlement. It can either make immediate payment of $2,673,000, or it can make annual payments of $347,100 for 15 years, each payment due on the last day of the year. Click here to view factor tables. Which method of payment do you recommend, assuming an expected effective interest rate of 10% during the future period? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Present value of annual payments Recommended payment method Annual Payments 44
Assuming a 12% annual interest rate, determine the present value of a five-period annual annuity of $6,500 under each of the following situations: Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) 1. The payments are received at the end of each of the five years and interest is compounded annually. 2. The payments are received at the beginning of each of the five years and interest is compounded annually. 3. The payments are received at the end of each of the five years and interest is compounded quarterly. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Deposit Date The payments are received at the end of each of the five years and interest is compour Note: Round your final answers to nearest whole dollar amount. First payment Second payment Third payment Fourth payment Fifth payment j= 3% 3% 3% 3% 3% Required 3 X Answer is complete but not entirely corre n= 4 ✓ $ 8 12 16 ✓…
You deposit $8000 in year 1, $7500 in year 2, and amounts decreasing by $500 per year through year 15. At an interest rate of 15% per year, determine the annual worth equivalent through year 1 to 15. Select one: O a. 4540.89 O b. 10282.48 c. 9862.73 O d. 6137.27 O e. 5717.52
This questi Consider a loan of $7700 at 6.8% compounded semiannually, with 18 semiannual payments. Find the following. (a) the payment necessary to amortize the loan (b) the total payments and the total amount of interest paid based on the calculated semiannual payments (c) the total payments and total amount of interest paid based upon an amortization table. (a) The semiannual payment needed to amortize this loan is $ 545.94. (Round to the nearest cent as needed.) (b) The total amount of the payments is $ 9827.07 (Round to the nearest cent as needed.) The total amount of interest paid is $ 2127.07 (Round to the nearest cent as needed.) (c) The total payment for this loan from the amortization table is $ (Round to the nearest cent as needed.) The total interest from the amortization table is $ (Round to the nearest cent as needed.)
Krista borrowed $17,432. The loan is to be repaid by three equal payments due in 80, 154, and 263 days from now respectively Determine the size of the equal payments at an interest rate of 7% with a focal date of today The size of the equal payments is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed)
Complete the following amortization chart by using Table 15.1. Note: Round your "Payment per $1,000" answer to 5 decimal places and other answers to the nearest cent. Selling price of home $ Down payment 75,000 $ Principal (loan) 4,000 $ 71,000.00 Rate of interest 5.5 % Years 30 Payment per $1,000 Monthly Martege Payment r
Determine the interest earned on $5000 deposited in a savings account, for 10 years, based on one of the following quoted interest rates: 6% compounding annually, semiannually, quarterly, monthly, and daily. The solution to this problem is presented in Table 20.5 .

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