Required: a. Calculate the forward rate of interest for each year. b. How could you construct a 1-year forward loan beginning in year 3? c. How could you construct a 1-year forward loan beginning in year 4?

Q: A loan 1000 is repaid by equal annual amounts of principal for 10 years and annual interest of 7% on…

A: Equal installment  = Loan Amount / present value annuity Factor @rate of interest for life

Q: Q1: Calculate (PW) for annual payments (900$/year) if the first payment will deposit at the present…

A: PW is the present worth. The person is investing 900$ annually at the beginning of the year. The…

Q: A loan 1000 is repaid by equal annual amounts of principal for 10 years and annual interest of 7% on…

A: "The question consists of three sub-parts but we are solving only part C as specified by you." Here,…

Q: Consider an amortized loan of $80,000 at an interest rate of 5.0% for 15 years with annual payments.…

A: Amortized loan refers to an amount borrowed by the borrower from the lender at some specified arte…

Q: What was the interest rate on a 3.5-year loan, $1000 loan if the simple interest paid was $297.50?

A: Interest rate = (Total interest / amount) * (1/time)

Q: Q7. The annual payment of a lorry is 40,000 Euro find out the loan amount which is granted for 4…

A: The objective of the question is to find out the loan amount for a lorry with an annual payment of…

Q: A basic ARM is made for $217,000 at an initial interest rate of 6 percent for 30 years with an…

A: A loan agreement is a legal document that outlines the terms and conditions of a loan between a…

Q: Assume a $620,000 loan over a 20 year period at a fixed rate of 5.85%. How much would a borrower…

A: Loan amount "PV" = $620000 Annual rate = 5.85% Monthly rate "r" = 5.85%/12 NUmber of years = 20…

Q: He then asks you to describe the advantages and disadvantages of a 15-year loan versus a 30-year…

A: Mortgages:-A mortgages is an loan that is used to purchase various assets like home, land etc. In…

Q: Example 6 A person requires a loan of R10 000. The bank offers a simple interest rate of 15% p.a..…

A: Lets understand the basics. For calculating loan period we will need to use below formula. Interest…

Q: A borrower can obtain an 80 percent loan with an 8 percent interest rate and monthly payments. The…

A: The incremental cost of borrowing is the cost needed to pay over and above the cost of using one…

Q: It is important to know how to build an amortization schedule when firms (or individuals) take out…

A: Given: Loan amount (P): $60,000 Number of periods (n): 3 years =3*12= 36 months Interest (i): 12%…

Q: Use the ordinary interest method to compute the time (in years) for the loan. Round your answer up…

A: Principal (P) = $25,000Rate (R) = 8.6%Interest (I) = $10,750

Q: What is the actuarial rate for a simple loan of $1,500 that requires a repayment of 2,000 in 5

A: In this we have to calculate effective interest rate by use of present and future value.

Q: Find the interest paid on a loan of $2,700 for one year at a simple interest rate of 11% per year.…

A: Simple interest = Principle × rate × time

Q: A basic ARM is made for $203,000 at an initial interest rate of 6 percent for 30 years with an…

A: A loan is a financial agreement in which a party, often a financial institution or lender, lends a…

Q: Outstanding Regular Payment Principal Component of Payment Period Interest Balance Component of…

A: A = Loan amount =              100,000.00 B = Regular Payment =                31,547.08 C =…

Q: 4. Draw a CFD for P10,501 being loaned out at an interest rate of 12% per year over a period of 6…

A: Principal; P= P10,501 Interest rate; R=12% Time period; T= 6 years

Q: 1. What would have been the normal monthly payment for a loan like this?  R  Blank 1. Fill in the…

A: The monthly payment on a loan refers to the periodic repayment amount extended to the lender. Loan…

Q: What is the simple interest rate on a loan of 2,000.00 that was paid 2,600.00 after 2 years and 6…

A: Interest = Amount - Principal Interest = 2,600 - 2,000 Interest = 600 Time = 2 years 6 months = 2.5…

Q: A borrower can obtain an 85 percent loan with an 6 percent interest rate and monthly payments. The…

A: The incremental cost of borrowing is the cost needed to pay over and above the cost of using one…

Q: What is the amount of compensating balance would be required for a nominal interest rate of 12% to…

A: Borrowings are the loan which is taken by the individual to meet its financial requirements. The…

Q: Question 2: (a) You wish to buy a house. The market value of the house is $650,000 and you have…

A: The present value of the loan is equal to the sum of the present values of all future monthly…

Q: Suppose that you borrow a certain amount of money at 4% effective and you will repay the loan by…

A: Loans are paid by the equal fixed periodic payments that carry the payment for interest and also…

Q: 5. What is the yield to maturity on a simple loan for $1 million that requires a repayment of $2…

A: Amount of repayment (A) = $2,000,000 Principal amount taken (P) = $1,000,000 Term (n) = 5 years Let…

Q: compute the initial value of the money if the borrower needs deposit the accumulated amount of…

A: With the application of time value of money, we can compute the initial deposit which will become $…

Q: A loan of P5,000 is made for a period of 15 months, at a simple interest rate of , what future…

A: We need to use simple  interest formula to calculate future amount due after loan period…

Q: Find the interest that will be deducted in advance from a loan of P25,000.00 due in 2 years if the…

A: Given Information : Amount of loan = ₱25,000 Annual interest rate = 6% Number of years = 2

Q: 3. A. Explain the difference between Installment Loan and Mortgage Loan. B. You are offered a simple…

A: a)- In the lending industry, mortgage loan and Instalment loan are often used alternatively.…

Q: A basic ARM is made for $203,000 at an initial interest rate of 6 percent for 30 years with an…

A: A loan is a financial agreement in which a party, often a financial institution or lender, lends a…

Q: Basic ARM is made for $250,000 at an initial interest rate of 6 percent for 30 years with annual…

A: Initial amount of loan = $250,000Interest rate for : Year 1 = 6% & Year 2 onwards = 7%Period =…

Completing the Accounting cycle

An accounting cycle is a multiple-step process that analyzes, verify, record and summarize the entities financial data. The accounting cycle starts when the transaction occurs between two parties and ends when the transaction is completed. The accounting cycle changes the entity's financial position as it involves identifying, verifying, and recording the financial transaction in chronological order. Financial position is the summary of business transactions that occurred throughout the particular accounting period. The accounting cycle recurs at the beginning of each financial year.