**Discount Loan (Interest and Principal at Maturity)**Chuck Ponzi has talked an elderly woman into loaning him $45,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $45,000 with an annual interest rate of 11% over the next 5 years. Determine the cash flow to the woman under a discount loan, in which Ponzi will have a lump-sum payment at the end of the contract.-----What is the amount of payment that the woman will receive at the end of years 1 through 4?$ [Box] (Round to the nearest cent.)

Answered: Discount loan (interest and principal…

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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Discount loan (interest and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning him $20,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $20,000 with an annual interest rate of 11% over the next 5 years. Determine the cash flow to the woman under a discount loan, in which Ponzi will have a lump-sum payment at the end of the contract. What is the amount of payment that the woman will receive at the end of years 1 through 4? $ (Round to the nearest cent.)
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $175,000. Chuck can get a secured add-on interest loan from his bank at 7.45% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,100 per month and amortize the loan in 42 months. 1) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.95% loan if Chuck can pay 20% down. What will Chuck's new monthly payment (in $) be with these conditions? (Round your answer to the nearest cent.) $ With these conditions, will Chuck be able to pay off the loan and meet his goals? Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high. 2) Attempting to reduce his monthly payment further, Chuck continues to negotiate with the seller. If the seller agrees to reduce the listed price by $4,800, finance the deal with a 6.95% loan, and if Chuck pays the 20% down, what will Chuck's monthly payment be (in $)?…
Rob asks his good friend Ted to borrow $5,000 and says he will pay it back to him in 6 months with 8% interest, meaning Rob will owe Ted $5,200 if he pays it back at that time. Ted asks Rob to "make" a promissory note payable to Ted stating these terms. Rob does prepare the "note" and signs and gives it to Ted and at the same time Ted gives Rob the $5,000. Ted in need of money unexpectedly, because he loses his job, contacts his buddy Gullible, and asks him if he will buy the note at a discount of $4,800. Gullible accepts and stands to make a nice profit when the note owed by Rob comes due. When Gullible gives Ted the $4,800, Ted writes on the note "Without Recourse" and signs his name and tenders the note to Gullible. Gullible does see Ted write this on the note, but is not sophisticated with regard to legal lingo, and thinks nothing of it. He therefater gets nervous and thinks maybe he should sell the note himself right away. He calls his aunt Saviour who says she will buy the…
Interest-only loan (regular interest payments each year and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning him $25,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $25,000 with an annual interest rate of 10% over the next 5 years. Determine the cash flow to the woman under an interest-only loan, in which Ponzi will pay the annual interest expense each year and pay the principal back at the end of the contract. What is the amount of payment that the woman will receive at the end of years 1 through 4? (Round to the nearest dollar.)
Suppose that you need $30,000 for your last year of college. You could go to a private lending institution and apply for a signature student loan; rates range from 7% to 14%. However, your Aunt Sally is willing to loan you the money from her retirement savings, with no repayment until after graduation. All she asks is that in the meantime you pay her each month the amount of interest that she would otherwise get on her savings (since she needs that to live on), which is 4%.What is your monthly payment to her, and how much interest will you pay her over the year (9 months)?(Fill in the blanks below and give your answers as whole numbers.)The amount of interest per month you would pay Aunt Sally is $__(1)__ .The total interest you will pay her over the year (9 months)is $__(2)__ .
Austin is taking out an amortized loan for $94,000 to open a small business and is deciding between the offers from two lenders. He wants to know which one would be the better deal over the life of the small business loan, and by how much. Answer each part. Do not round intermediate computations, and round your answers to the nearest cent. If necessary, refer to the list of financial formulas. (a) A bank has offered him a 10-year small business loan at an annual interest rate of 11.3%. Find the monthly payment. (b) An online lending company has offered him a 8-year small business loan at an annual interest rate of 14.2%. Find the monthly payment. re) Suppose Austin pavs the monthly pavment each month for the full t 2021 Continue %23 & 2 3 7.
Number of payments. Tony is offering two repayment plans to Phil for a long overdue loan. Offer 1 is to receive a visit from an enforcer and the debt is due in full at once. Offer 2 is to pay back $3,700 at the end of the year at an interest rate of 22% until Phil pays off the loan principal. Phil owes Tony $15,000. How long will it take for Phil to pay off the loan if he takes offer 2? ..... How long will it take for Phil to pay off the loan if he takes offer 2? years (Round to two decimal places.)
wally bee purchased a home for $600,000 with a $150,000 down oayment. he financed the remainder with a 6% mortgage for 30 years. wallys bank has offered to lower the 6% interest rate on his 30 year loan to 5.50%. if wally will pay 1 7/8 points. what will the points cost wally?
Discount loan (interest and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning him $45,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $45,000 with an annual interest rate of 11% over the next 5 years. Determine the cash flow to the woman under a discount loan, in which Ponzi will have a lump-sum payment at the end of the contract. What is the amount of payment that the woman will receive at the end of years 1 through 4? $nothing (Round to the nearest cent.)
Kari is purchasing a home for $220,000. The down payment is 25% and the balance will be financed with a 15 year mortgage at 8% and 4 discount points. Kari made a deposit of $20,000 (applied to the down payment) when the sales contract was signed. Kari also has these expenses: credit report, $70; appraisal fee, $110; title insurance premium, 1% of amount financed; title search, $200; and attorney's fees, $500. Find the closing costs (in $). $ ____________________
Tom wishes to purchase a property that's been valued at $400,000. He has 15% of this amount available as a cash deposit and will require a mortgage for the remaining amount. The bank offers him a 15-year mortgage at 2.5% interest. Calculate the total interest Tom will pay over the lifetime of the loan. Round your answer to the nearest dollar. Do not rould until you have calculated the final answer.

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