Compute 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 $99,000 ten years from now at an interest rate of 7%.2. An agreement to make three separate annual payments of $20,000, with the first payment occurring 1 year from now. The annualinterest rate is 5%.Option 1Loan amountOption 2paymentsTable ValueTable ValueAmountAmount$Present ValuePresent Value0

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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A loan of $1500 is to be repaid by annual payments of $250 to commence at the end of the fifth year and to continue thereafter for as long as necessary. Find the amount of the final payment, if the final payment is to be larger than the regular payments. Assume i = 5%. Round your answer to two decimal places.
Suppose you borrow $14,000. The interest rate is 11%, and it requires 4 equal end-of-year payments. Set up an amortization schedule that shows the annual payments, interest payments, principal repayments, and beginning and ending loan balances. Round your answers to the nearest cent. If your answer is zero, enter "0". Beginning Repayment Ending Year Balance Payment Interest of Principal Balance 1 $ fill in the blank 60 $ fill in the blank 61 $ fill in the blank 62 $ fill in the blank 63 $ fill in the blank 64 2 $ fill in the blank 65 $ fill in the blank 66 $ fill in the blank 67 $ fill in the blank 68 $ fill in the blank 69 3 $ fill in the blank 70 $ fill in the blank 71 $ fill in the blank 72 $ fill in the blank 73 $ fill in the blank 74 4 $ fill in the blank 75 $ fill in the blank 76 $ fill in the blank 77 $ fill in the blank 78 $ fill in the blank 79
1. If you borrow $2,400 and agree to repay the loan in four equal annual payments at an interest rate of 10%, what will your payment be? (Do not round intermediate calculations. Round your enswer to 2 decimal places.) Amount of payment b. What if you make the first payment on the loan immediately instead of at the end of the first year? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Repayment amount %24 %24
Find the amortization table for a $8,000 loan amortized in five annual payments if the interest rate is 4.3% per year compounded annually. (Round your answers to the nearest cent.) End ofPeriod RepaymentMade InterestCharged PaymentTowardPrincipal Outstanding principle 0 8,000 1 2 3 4 5
Consider a loan of $1,000 for five years with 10% add-on interest and the loan is to be paid off in five year-end payments. The funds that are borrowed (available to the borrower) are $1,000 and the “interest” is $100 × 5 = $500. The installments are calculated based on a loan principal amount of $1,000 + 500 = $1,500: $1,500/5 = $300 each. How much is the borrower really paying to borrow $1,000? Let’s restate this loan in more familiar terms: Present value = $1,000 Number of payments = 5 Amount of each payment = $300 and $1,000 = $300(present value of an annuity for T = 5 and r = ?) What is r=?
A partially amortizing loan for $92,000 for 10 years is made at 6 percent interest. The lender and borrower agree that payments will be monthly and that a balance of $20,000 will remain and be repaid at the end of year 10. Required: a. Assuming 4 points are charged by the lender, what will be the yield if the loan is repaid at the end of year 10? b. What must the loan balance be if it is repaid after year 4? c. What will be the yield to the lender if the loan is repaid at the end of year 4? Note: For all requirements, do not round intermediate calculations, round your final answers to 2 decimal places.
basic ARM is made for $220,000 at an initial interest rate of 6 percent for 30 years with an annual resetdate. The borrower believes that the interest rate at the beginning of year (BOY) 2 will increase to 7 percent. Required:a. Assuming that a fully amortizing loan is made, what will the monthly payments be during year 1? b. Based on (a) what will the loan balance be at the end of year (EOY) 1? c. Given that the interest rate is expected to be 7 percent at the beginning of year 2, what will the monthlypayments be during year 2? d. What will be the loan balance at the EOY 2 ? e. What would be the monthly payments in year 1 if they are to be interest only?
Give typing answer with explanation and conclusion a loan of 4415$ borrowed today is to be repaid in three equal installments due in one and a half years, four years, and five years, respectively. what is the size of the equal installments if money is worth 9.2% compounded monthly? The payments are each$?
Find the periodic payment R required to amortize a loan of P dollars over t years with interest charged at the rate of r%/year compounded m times a year. (Round your answer to the nearest cent.) P = 60,000, r = 3, t = 14, m = 12
Investigate the effect of the term on simple interest amortized auto loans by finding the monthly payment and the total interest for a loan of $16,000 at 9 7/8% interest if the term is the following. (Round your answers to the nearest cent.) (a) three years payment total interest (b) four years payment $ total interest $ (c) five years payment $ total interest $
1. Suppose you borrow $16,000. The interest rate is 9%, and it requires 4 equal end-of-year payments. Set up an amortization schedule that shows the annual payments, interest payments, principal repayments, and beginning and ending loan balances. Round your answers to the nearest cent. If your answer is zero, enter "0".

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