The truck that we will use in our business costs $90,000. 10% of this cost will be paid as a down payment. For the remaining cost of this truck, we will take out a loar from a bank at 25% APR, compounded semiannually. We will make a monthly installment to pay off the loan in two years. Using this information, determine the principle payment in 15th payment. a) Between $3,200 and $3,400 O b) None of the answers is correct c) Between $3,600 and $3,800 d) Between $3,400 and $3,600O e) Between $4,100 and $4,300

The truck that we will use in our business costs $90,000. 10% of this cost will be paid as a down payment. For the remaining cost of this truck, we will take out a loar from a bank at 25% APR, compounded semiannually. We will make a monthly installment to pay off the loan in two years. Using this information, determine the principle payment in 15th payment. a) Between $3,200 and $3,400 O b) None of the answers is correct c) Between $3,600 and $3,800 d) Between $3,400 and $3,600O e) Between $4,100 and $4,300

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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Smith's Trailer Sales will finance a 16-foot utility trailer with ramps and electric brakes. If a down payment of $90 and eight monthly payments of $84.15 are required, what is the installment price of the trailer? The installment price is s
An installment contract for the purchase of a car requires payments of $206.33 at the end of each month for 5 years. Interest is 5% per annum compounded monthly. (a) What is the amount financed? (b) How much is the interest cost?
A contractor’s price for a new building was $96,000. You decide to buy the building, making a payment of $12,000 down and financing the balance by making equal payments at the end of every 6 months for 12 years. Interest is 7.3% compounded semi-annually. B) For the first payment period, how much interest is paid, how much of the principal is repaid, and what is the loan balance at the end of first installment? how much interest is paid how much of the principal is repaid what is the loan balance? C) For the fifteen payment period, how much interest is paid, how much of the principal is repaid, and what is the loan balance at the end of first installment? how much interest is paid how much of the principal is repaid what is the loan balance?
A scheduled payment of $5,500 due in one year is to be replaced with two payments: the first due in 8 months and the second due in 17 months. Calculate the size of the two payments if the second payment is to be twice as large as the first payment, and money can earn 9% compounded monthly. First payment: $0.00 Second payment: Round your answers to the nearest cent $0.00
A company buys a machine for $18,000, which it agrees to pay for in five equal annual payments, beginning one year after the date of purchase, at an annual interest rate of 7%. Immediately after the second payment, the terms of the agreement are changed to allow the balance due to be paid off in a single payment the next year. What is the final single payment? Solution: 1. Draw the CFD by yourself; 2. First, calculate annual payment amount for the first 2 years: O A= + 7%, • )=18000x =$ o The final payment is the • worth of the : unpaid payments. 3. Second, Calculate the single payment amount due at the end of the 3rd year: F=S
An installment contract for the purchase of a car requires payments of $346.34 at the end of each month for 2 years. Interest is 5% per annum compounded monthly. (a) What is the amount financed? (b) How much is the interest cost? (a) The amount financed is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The interest is $. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Round to the nearest cent as needed.
A new hotel built in Banff cost $56 million to build. The owner's financing arrangements allow for quarterly payments at 8.2% compounded semi-annually over the next 20 years. The first payment is to be made today. a. What is the amount of the final payment? Number b. Calculate the principal and interest portions of the payments in the final five years. Principal (PRN) = Number Interest (INT) = Number
Lola's Furniture is offering a "houseful of furniture" for $9,999. Furthermore, if you make a down payment of $999 you can wait for 1½ years to pay the $9,000 balance. If Lola's Furniture immediately sells the $9,000 receivable contract to the Barzini Finance Group at a discount rate of 18% compounded quarterly, how much money will Lola's actually receive for the "houseful of furniture"?
You are negotiating to buy a new car with a car salesman at a local dealer. You have negotiated the price to $38,000. You have $3,000 to put towards the down payment and plan to get a loan for the rest. If you can get an annual interest rate of 11 percent APR (with monthly compounding) over a 5-year period, what would be your monthly payment? Round it to two decimal place (cents), e.g., 234.56.
prepare an amortization schedule showing the first four payments for each loan. Large semitrailer trucks cost $110,000 each. Ace Trucking buys such a truck and agrees to pay for it by a loan that will be amortized with 9 semiannual payments at 8% compounded semiannually.
Apple has purchased land for $500,000 for their new factory. They make a down payment of $100,000, and the remainder is financed at (15) percent compounded semi-annually with semi-annual payments over 4 years. Develop an Excel® table to illustrate the payment amounts and schedule for the loan, assuming payback follows a) Plan 1: Pay the accumulated interest at the end of each interest period and repay the principal at the end of the loan period. b) Plan 2: Make equal principal payments, plus interest on the unpaid balance at the end of the period. c) Plan 3: Make equal end-of-period payments. d) Plan 4: Make a single payment of principal and interest at the end of the loan period. e) A different plan: Pay off the principal in such a way that it is X, 1.5X, 2X, 2.5X... till the end of the last payment period. In addition, pay the accumulated interest at the end of each interest period.

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