Otto Company borrows money on January 1 and promises to pay it back in four semiannual payments of $15,000 each on June 30 and December 31 of both this year and next year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) 1. How much money is Otto able to borrow if the interest rate is 2%, compounded semiannually? 2. How much money is Otto able to borrow if the interest rate is 6%, compounded semiannually? 3. How much money is Otto able to borrow if the interest rate is 8%, compounded semiannually?
Otto Company borrows money on January 1 and promises to pay it back in four semiannual payments of $15,000 each on June 30 and December 31 of both this year and next year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) 1. How much money is Otto able to borrow if the interest rate is 2%, compounded semiannually? 2. How much money is Otto able to borrow if the interest rate is 6%, compounded semiannually? 3. How much money is Otto able to borrow if the interest rate is 8%, compounded semiannually?
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
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Transcribed Image Text:Otto Company borrows money on January 1 and promises to pay it back in four semiannual payments of $15,000 each on June 30 and
December 31 of both this year and next year. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables
provided. Round "Table Factor" to 4 decimal places.)
1. How much money is Otto able to borrow if the interest rate is 2%, compounded semiannually?
2. How much money is Otto able to borrow if the interest rate is 6%, compounded semiannually?
3. How much money is Otto able to borrow if the interest rate is 8%, compounded semiannually?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
How much money is Otto able to borrow if the interest rate is 2%, compounded semiannually?
Periodic Cash Flow
$
15,000
Required 3
X
Table Factor
4.0000 = $
Present Value
< Required 1
5,782
Required 2 >
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