D. Luke Company is indeed of P3,375,00 to finance its building expansion program. Luke is currently negotiating a loan with Metro Bank which requires the company to maintain a compensating balance of 5% of the loan principal on deposit in a current account at the bank. Luke Inc. currently maintains a balance P50,000 in its current account . The current account earns interest of 4% per annum; the interest rate on the loan is 12% per annum. Questions: Based on the above data, answer the following A. What is the principal amount of the loan? a. P3,375,000 b. P3,325,000 c. P3,500,000 d. P3,480,000 41 B. What is the effective interest rate on the loan a.8% b.12.91% c.12.30% d. 12%

D. Luke Company is indeed of P3,375,00 to finance its building expansion program. Luke is currently negotiating a loan with Metro Bank which requires the company to maintain a compensating balance of 5% of the loan principal on deposit in a current account at the bank. Luke Inc. currently maintains a balance P50,000 in its current account . The current account earns interest of 4% per annum; the interest rate on the loan is 12% per annum. Questions: Based on the above data, answer the following A. What is the principal amount of the loan? a. P3,375,000 b. P3,325,000 c. P3,500,000 d. P3,480,000 41 B. What is the effective interest rate on the loan a.8% b.12.91% c.12.30% d. 12%

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

Lush Gardens Co. bought a new truck for $52,000. It paid $5,720 of this amount as a down payment and financed the balance at 4.08% compounded semi-annually. If the company makes payments of $1,700 at the end of every month, how long will it take to settle the loan? a. How many deposits will the company have to make to settle the loan? Round up to the next whole number b. How long will it take to settle the loan? years months E Express the answer in years and months, rounded to the next payment period
A firm purchases 150 acres of land for $195,000 and agrees to remit 17 equal annual end-of-year installments of $25,831.94 each. What is the true annual interest rate on this loan?
To travel to America via the ship Titanic, Juana made a P100,000 loan which is to be paid over a term of 2 years at 7.2% interest convertible quarterly. The lender wants only payments of interest until the end of the term when the loan balance P100,000 must be repaid in full. The borrower will make level quarter-end payments to a sinking fund earning 6% payable quarterly. 1.) Calculate the sinking fund Balance immediately after the 6th payment is made.
General Computers Inc. purchased a computer server for $54,000. It paid 40.00% of the value as a down payment and received a loan for the balance at 4.50% compounded semi-annually. It made payments of $2,800.81 at the end of every quarter to settle the loan. a. How many payments are required to settle the loan? 0 payments Round up to the next payment b. Fill in the partial amortization schedule for the loan, rounding your answers to two decimal places.
General Computers Inc. purchased a computer server for $70,000. It paid 35.00% of the value as a down payment and received a loan for the balance at 4.50% compounded semi-annually. It made payments of $2,850.75 at the end of every quarter to settle the loan. a. How many payments are required to settle the loan? payments Round up to the next payment b. Fill in the partial amortization schedule for the loan, rounding your answers to two Question 3 of 7 b. Fill in the partial amortization schedule for the loan, rounding your answers to two decimal places. Payment Number 0 1 2 Payment Interest Portion Principal Portion Principal Balance $45,500.00 11
General Computers Inc. purchased a computer server for $57,500. It paid 35.00% of the value as a down payment and received a loan for the balance at 10.50% compounded semi-annually. It made payments of $2,450.35 at the end of every quarter to settle the loan. a. How many payments are required to settle the loan? 0 payments Round up to the next payment b. Fill in the partial amortization schedule for the loan, rounding your answers to two decimal places. Payment Number Payment Interest Portion Principal Portion Principal Balance 0 $37,375.00 1 $0.00 $0.00 $0.00 $0.00 2 $0.00 $0.00 $0.00 $0.00 : : : : : :
Island News purchased a piece of property for $1.82 million. The firm paid a down payment of 20 percent in cash and financed the balance. The loan terms require monthly payments for 20 years at an APR of 4.00 percent, compounded monthly. What is the amount of each mortgage payment?
Givens, Hong, and Partners obtained a $8,100 term loan at 9.6% compounded annually for new boardroom furniture. Prepare a complete amortization schedule in which the loan is repaid by equal semiannual payments over three years. (Round your answers to the nearest cent. Do not round the intermediate calculations.) Payment Interest number Payment $ portion $ 0 DLN3 456 1 2 1624.80 1624.80 1624.80 1624.80 1624.80 1624.80 Principal portion $ Principal balance $ 8,100.00
Island News purchased a piece of property for $1.46 million. The firm paid a down payment of 20 percent in cash and financed the balance. The loan terms require monthly payments for 20 years at an APR of 4.33 percent, compounded monthly. What is the amount of each mortgage payment? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Note: You may use Excel or Google Sheets to solve this problem (highly recommended).
A motor vehicle which costs RM20,000 was bought on credit terms, with payment of 10% as deposit to be made immediately and the balance to be paid in one lump sum 6 months later. Total interest expense will be RM 2,270.92.(i) With loan amortization schedule, show the total amount be paid for the vehicle.
Apple has purchased land for $500,000 for their new factory. They make a down payment of $100,000, and the remainder is financed at (15) percent compounded semi-annually with semi-annual payments over 4 years. Develop an Excel® table to illustrate the payment amounts and schedule for the loan, assuming payback follows a) Plan 1: Pay the accumulated interest at the end of each interest period and repay the principal at the end of the loan period. b) Plan 2: Make equal principal payments, plus interest on the unpaid balance at the end of the period. c) Plan 3: Make equal end-of-period payments. d) Plan 4: Make a single payment of principal and interest at the end of the loan period. e) A different plan: Pay off the principal in such a way that it is X, 1.5X, 2X, 2.5X... till the end of the last payment period. In addition, pay the accumulated interest at the end of each interest period.
The Royal Bank pays an interest rate of 0.6% on redeemable GICs and 0.75% on non-redeemable GICs. In order to retain the redemption privilege, how much interest must be sacrificed on an investment of $15,000 for 120 days?