Problem #2: Installment Note Proferred Corporation purchases an asset and finances it with a note payable. Information regarding the transaction follows: YOU WILL NEED THE KIESO PRESENT VALUE TABLES FOR THIS PROBLEM. Cost of asset 450,000 450,000 12% years times per year Amount Financed Annual Interest Rate Installment loan term Payments are made USE PROBLEM #2 TO ANSWER QUESTIONS 8 THRU 10 BELOW 8.) Calculate the periodic payment on the note payable. 9.) What is the total amount of interest that will be paid on the note payable over the two year period? 10.) If the company wishes to get the loan paid off in ONE year instead what will the new quarterly payments be?

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
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Problem #2: Installment Note
Preferred Corporation purchases an asset and finances it with a note payable. Information regarding the transaction follows:
YOU WILL NÉED THE KIESO PRESENT VALUE TABLES FOR THIS PROBLEM.
Cost of asset
450,000
450,000
12%
years
times per year
Amount Financed
Annual Interest Rate
Installment loan term
Payments are made
USE PROBLEM #2 TO ANSWER QUESTIONS 8 THRU 10 BELOW
8.) Calculate the periodic payment on the note payable.
9.) What is the total amount of interest that will be paid on the note payable over the two year period?
10.) If the company wishes to get the loan paid off in ONE year instead what will the new quarterly payments be?
Transcribed Image Text:Problem #2: Installment Note Preferred Corporation purchases an asset and finances it with a note payable. Information regarding the transaction follows: YOU WILL NÉED THE KIESO PRESENT VALUE TABLES FOR THIS PROBLEM. Cost of asset 450,000 450,000 12% years times per year Amount Financed Annual Interest Rate Installment loan term Payments are made USE PROBLEM #2 TO ANSWER QUESTIONS 8 THRU 10 BELOW 8.) Calculate the periodic payment on the note payable. 9.) What is the total amount of interest that will be paid on the note payable over the two year period? 10.) If the company wishes to get the loan paid off in ONE year instead what will the new quarterly payments be?
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