1. Robert borrowed a certain sum of money from Joey on June 1, 1994 and signed a notepromising to pay him a total of P 20,000 at the end of 5 years. Joey sold this promissorynote to Peter on June 1, 1997. If Peter insists on discounting the note at 5% compoundedquarterly, what will he pay for the note?2. In this regard to the promissory note on Problem 1, Robert gets permission to delay hispayment until June 1, 2999, under the assumption that money is worth 5% compoundedquarterly after the note measures. What final payment is Robert required to make?

A promissory note is a financial instrument that is issued on a current date with a promise to pay a…

Answered: 1. Robert borrowed a certain sum of…

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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Monty Inc. loans money to John Kruk Corporation in the amount of $688,000. Monty accepts an 8% note due in 7 years with interest payable semiannually. After 2 years (and receipt of interest for 2 years), Monty needs money and therefore sells the note to Chicago National Bank, which demands interest on the note of 10% compounded semiannually. What is the amount Monty will receive on the sale of the note? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.) Amount received on sale of note $ 637872
10) Vanessa wants to withdraw $8,000 each year from July 1, 2025 through July 1, 2029. The investment fund earns interest at a rate of 5%. In order to make these withdrawals, Vanessa will invest an annuity on July 1, 2021 through July 1, 2024. Calculate the annuity Vanessa needs to invest each year. Yellow Company purchases a truck on January 1, 2021. According to the contract Yellow will not make any payments in 2021, 2022 and 2023. Yellow is to make an annuity payment of $5,000 starting December 31, 2024 through December 31, 2028. Calculate the cost of the truck. 11) Stella has $3,000,000 in her investment fund. She wishes to withdraw $338,868 12) at the end of each of the next 13 years. What interest rate must she earn in order to accomplish her goal. A note receivable that is due in 15 months from now is always classified as a 13) long-term asset. (True/False) 14) A long-term note receivable should be disclosed in Other Assets in a classified balance sheet. (True/False)
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Williams buys GH¢5000 worth of home furnishings from AGC Furniture. He pays GH¢500 down and agrees to pay the balance in monthly installments over 5 years at j12 = 18%. The contract stipulates a penalty in case of earlyrepayment, equal to 3 months’ payments. After 2 years, Williams realizes he can borrow from the bank at j12 = 12%. Should he refinance?
Eric borrowed $4,695 from Roger and signed a contract agreeing to pay it back 10 months later with 4.15% simple interest. After 3 months, Roger sold the contract to Chris at a price that would earn Chris 5.00% simple interest per annum. Calculate the price that Chris paid Roger. Your Answer: 4 Answer
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