To travel to America via the ship Titanic, Juan made a P100,000 loan which is to be repaid over a term of 2 years at 7.2% interest convertible quarterly. The lender wants only payments of interest until the end of the term when the loan balance P 100,000 must be repaid in full. The borrower will make level quarter-end payments to a sinking fund earning 6% payable quarterly.

Q: relationship between Future Value Factor and Future Value of an Annuity Factor

A: Future value factor is the equivalent value at the some future date of a cash flow at time 0. For…

Q: When do the funds earn interest at the MARR?

A: The MARR (Minimum Acceptable Rate of Return), generally referred to as hurdle rate is the lowest or…

Q: NN Company operates on a 6-day week, with time and one-quarter for all hours over eight during the…

A: It is the amount to be withheld by an employer from an employee, if the employees' annual income…

Q: How to find present value annuity

A: Present value: It is the present value of the sum of money that a firm is going to receive at some…

Q: Explain the concept of time value of money. Differentiate between present value and future value.…

A: 1) The time value of money is a financial concept that holds that money in the present is worth more…

Q: Define effective annual rate (EAR) with examples. Differentiate between annuity cash flows and mixed…

A: Nominal interest rate (annual interest rate) is the annual rate without effect of compounding.

Q: What is an annuity? How does it differ from a lump sum payment?

A: Annuity:An annuity refers to a series of payments made at regular time intervals. These are…

Q: What is the Times-interest·earned ratio?

A: It is important to analyze whether a company has ability to pay off its debts. Means, it is…

Q: what is an annuity? Provide an example

A: Annuity is an important concept in finance especially in the context of time value of money. Annuity…

Q: pact does time period hav

A: Annuities are the uniform periodic payment that are paid at the end of period or beginning of the…

Q: End of Interest Amount Owed End of Year Amount Owed Year for Year After Interest Payment After…

A: Interest rate in the table is::10%{1000/10,000*100).. A is::9900-2000=7900.. B is::790 (7900*10%) C…

Q: What is the net present value of an annuity?

A: Net present value is defined as the temporal variation in the present value of cash inflows and…

Q: How much is the estimated payment to liabilities with priority?

A: The determination of estimated payment to Liabilities with priority is shown hereunder : The…

Q: please use a specific example to compare what is the discount rate% and what is the investment rate…

A: Explanation:-   Discount rate % on treasury bills: The income generated on the T-bill is equal to…

Q: How does inflation affect interest rates, security prices, and financial planning?

A: Inflation is the situation in the economy due to which prices of goods and services increases, as a…

Q: How to find the incrementa

A: Incremental cost is an additonal cost which a manufacturer incurs due…

Q: Write an equation for determining the value of the series of end-of-period payments?

A: Formula:

Q: What is the annual profit?

A: The cost-volume profit analysis deals with the cost of the product and the profit generated with the…

Q: What is present value of annuity A

A: First payment = $1000Period = 20 yearsIncrement = 3%Interest rate = 5%

Q: The term sinking fund is used when we know the sum we need to accumulate and must find the amount of…

A: Introduction: Sinking fund is a type of fund which is used by corporates especially if they want to…

Q: What is going interest rate?

A: An interest rate is the rate which is applicable on loan and the borrower has to pay the interest…

Q: What is Internal Rate of Return - Monthly Fixed Cash Flows with Reversions?  Please provide…

A: The internal rate of return is the one of the discounted techniques of capital budgeting which is…

Q: What’s the difference between an ordinary annuity and an annuity due?

A: Annuity is the fixed sum paid on annual basis. In other words, annuity is the series of payment…

Q: Compute the payback period for an investment with the following net cash flows. (Round your answer…

A: Last year in which cumulative net cash flow is negative (Y)  = 4th year Minimum cash inflow required…

Q: What is Annual-payments option?

A: The annual payment option is the obligation to pay the amount to the receiver annual instead of the…

Q: When is it recommended to compute the effective interest rate per payment period?

A: When there is a compounding of interest, then the EIR per payment period is recommended. As it is a…

Q: Discuss the present value of an annuity due with an example

A: Present value of an annuity An Annuity is a stream of regular periodic payments made or received for…

Q: What happens to the present value of some fixed dollar amount to be received in the future as time…

A: Present value of some fixed dollar amount  is obtained by discounting the future cash flows using an…

Q: Illustrate with examples , that Interest rate is equivalent to the savings rate from the deposits?

A: Interest received It is the amount that is received to a person for the investment made. A rate at…

Q: It is the difference between the present value and the worth of money at some time in the future.

A: Money has the power to earnt interest. A sum of money that you put in your bank's savings account…

Q: What does the Times Interest Earn ratio state? Provide an example

A: Times interest earned ratio tells about the ability of the company to pay it's obligations which is…

Q: t are the long-term sources of finance? Give various sources from which the long-term funds can be…

A: Step 1 The financial market, specialized financial institutions, banks, non-bank financial…

Q: What is the initial investment plus interest?

A: The total of initial investment and interest will give the total value or worth of the investment…

Q: How can we calculate the net present worth of each payment?

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: How can we determine the borrowing rate of return?

A: The borrowing rate of return is the return that is charged on the borrowings made by the firms or…

Q: Give an interesting feature of any perpetual annuity?

A: Interesting feature of any perpetual annuity: The feature of perpetual annuity is that, a stream of…

Q: What is the real interest rate on your savings account?

A: Real Interest Rate = Nominal Interest Rate − Inflation Rate

Q: Define the term the annuity factor?

A: An annuity factor is financial value that, when multiplied by a periodic amount, then it shows the…

Q: Batik Company presents the following summarized balances of its projected 2021 balance sneet:…

A: calculation of external fund batik company needs are as follows

Q: How much will be the total amount of remittance to SSS?

A: Remittance of SSS SSS is a type of retirement benefit which are provided to the employees after the…

Q: How do I calculae the times interest earned ratio?

A: Calculate the times interest earned ratio as follows: Times interest earned ratio = EBIT / Interest…

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.