in equal annual installment of P600,000 at the end of each ofJoshua Company bought a new machine and agreed to payin equal annual installment of P600,000 at the end of each ofthe next five years. The prevailing interest rate for this typeof transaction is 12%.The present value of an ordinary annuity of 1 at 12% for fiveperiods is 3.60. The future amount of an ordinary annuity ofi at 12% for five periods is 6.35. The present value of 1 at12% for five periods is 0.567.1. What amount should be reported as note payable iffinancial statements were prepared today?a. 1,700,000b. 2,160,000c. 3,000,000d. 3,810,0002. What is the interest expense for the first year?a. 259,200b. 187,200c. 360,000d. 457,200

In order to determine the interest expense, the amount reported as notes payable is required to be…

Answered: Joshua Company bought a new machine and…

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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The compounding periods and the payment periods are the same for an annuity and for an amortization. Determine the present value of the annuity that will pay the given periodic payments. (Round your final answer to two decimal places.) Periodic payments of $2400 annually for 13 years. The interest is 4% compounded annually.
A 25-year annuity was purchased with $225,000 that had accumulated in a RRSP. The annuity provides a semiannually compounded rate of return of 9.5% and makes equal month-end payments. What amount of principal will be included in Payment 206? What will be the interest portion of Payment 187? How much will the principal be reduced by Payments 50 to 100 inclusive? How much interest will be paid in the 14th year? What will be the amount of the final payment?
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An annuity-due makes payments of $15 every other year, with the first payment beginning immediately. The annuity-due makes ten payments. The nominal annual interest rate compounded semiannually is 5%. Calculate the present value of the annuity due. a. 100.0958 O b. 93.2775 O c. 66.7310 d. 124.3700 O e. 133.4620
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an investment is expeted to result in equal payments of $9740.00 at the end of each month for the next 7 years (ordinary annuity). Compounding: 12 times per year If the appropriate required rate of return (discount rate) is 4% what is the present value of the annuity stream?
Find the accumulated value of an annuity-immediate which pays 1 at the end of each half-year for five years, if the rate of interest is 7% convertible semi-annually for the first two years, 9% convertible semi-annually for the next two years, and 8% convertible semi-annually for the last year.
Annuity A has 20 years annual payments as follows:- i) ii) iii) Annuity i) ii) iii) The first payment is 1000 made at the end of the first year. The subsequent payments increase by 3% from the previous years. The effective interest rate is 5% per annum. B has 20 years annual payments as follows:- The first payment is X made at the end of the first year. The subsequent payments increase by X from the previous years. The effective interest rate is 6% per annum. Annuity C is an annuity immediate of 20-year annual level payments with effective interest rate of 7% per annum. Evaluate, (a) Present value of Annuity A (b) X if present value of Annuity A is equal to present value of Annuity B. stelua. [3 marks] (c) Level payment of Annuity C if present value of Annuity C is TWICE the present value of Annuity A. (d) Sum of future value of these annuities at the end of 20 years. 13 marks] Preval 13 marks
Provide manual solutions to below mentioned problems. An engineer is entitled to receive P25,000 at the beginning of each year for 18 years. If the rate of interest is 4% compounded annually. 1. What is the present value of this annuity at the time he is supposed to receive the first payment?2. What is the sum of this annuity at the end of the 18th year?3. Find the difference between the sum of this annuity which is paid at the beginning of each year and an annuity paid at the end of each year. Answer. 1. P329,141.72 2. P666,780.73 3. P25,645.41
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The present value of an ordinary annuity of $350 each year for five years, assuming an interest rate of 4%, is: $288 $1,558 $1,896 $1,750

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