Determine the amount of cash Concord received from the loan on December 31, 2020. (Round present decimal places, e.g. 0.52513 and final answer to 0 decimal places, e.g. 5,275.)
Determine the amount of cash Concord received from the loan on December 31, 2020. (Round present decimal places, e.g. 0.52513 and final answer to 0 decimal places, e.g. 5,275.)
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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Transcribed Image Text:On December 31, 2020, Concord Company signed a $1,290,500 note to Marigold Bank. The market interest rate at that time
was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower
sales, Concord's financial situation worsened. On December 31, 2022, Marigold Bank determined that it was probable that the
company would pay back only $774,300 of the principal at maturity. However, it was considered likely that interest would continue to
be paid, based on the $1,290,500 loan.
(a)
Determine the amount of cash Concord received from the loan on December 31, 2020. (Round present value factors to 5
decimal places, e.g. 0.52513 and final answer to 0 decimal places, e.g. 5,275.)
Amount of cash Concord received from the loan
$
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