Two debts, the first of $1100 due nine months ago and the second of $1700 borrownd one year ago for a term of four years at 6.9% compounded annuall, are to bereplaced by a single payment one year from now. Determine the sze of the replacement payment if interest is 6.1% compounded quarterly and the focal date is oneyear from now.The size of the replacement payment is S3159.34(Round to the nearest cent as needed. Round all intemediate values to six decimal places as needed.)

Compound Interest is also called interest on interest. It is the addition of interest in the…

Two debts, the first of $1100 due nine months ago and the second of $1700 borrowed one year ago for a term of four years at 6.9% compounded annually. are to be replaced by a single payment one year from now. Determine the size of the replacement payment if interest is 6.1% compounded quarterty and the focal date is one year from now. The size of the replacement payment is S3159.34 (Round to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Two debts, the first of $1100 due nine months ago and the second of $1700 borrowed one year ago for a term of four years at 6.9% compounded annually. are to be replaced by a single payment one year from now. Determine the size of the replacement payment if interest is 6.1% compounded quarterty and the focal date is one year from now. The size of the replacement payment is S3159.34 (Round to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 41P

See similar textbooks

Related questions

Q: A $23,300 loan is to be settled by making payments of $7,460 at the end of every six months. The…

A: Present Value of annuity is used to calculate the loan periodic payments. To calculate number of…

Q: A $22,550 loan is to be settled by making payments of $6,862 at the end of every three months. The…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: The interest ratç for the first three years of an $90,000 mortgage loan is 8.4% compounded…

A: It is assumed that the monthly payments made initially are at a rate of 8.4% compounded…

Q: In an amortization table for a four-year loan of $45,280, given an interest rate of 11%, how much…

A: N = 4 years Loan = $45,280 Interest Rate = 11% Principal payment in second year = ?

Q: A $46,000 loan at 8.9% compounded semiannually is to be repaid by semiannual payments of $3,400…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: a. Calculate the interest component of Payment 13. Interest b. Calculate the principal component of…

A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount…

Q: Two scheduled debt payments of $443 each are due two months and ten months from now respectively. If…

A: Payment due in 2 months = $443 Payment due in 10 months = $443 Interest rate = 8%

Q: A loan is being repaid by 15 annual instllments of 1000 each. Interest is at an effec- ive annual…

A: Amount in case of original loan terms: Annuity=1,000Interest rate=5%Time= 15 yearsAmount…

Q: (a) The amount financed is $ (Round the final answer to the neare (b) The interest is $ (Round the…

A: Amounts financed in the above case will be equal to the present discounted value of future payments.…

Q: Auto loan requires payments of 300 Rial at the end of each interval for 3 years at a nominal annual…

A: Calculation of Payment Intervals and Accumulated Amount: Excel Spreadsheet: Excel Workings:

Q: The size of the replacement payment is $ (Round to the nearest cent as needed. Round all…

A: We first need to find the FV of the loan that was due 3 months ago using the formula below FV1900 =…

Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

100%

Two debts, the first of $1100 due nine months ago and the second of $1700 borrownd one year ago for a term of four years at 6.9% compounded annuall, are to be
replaced by a single payment one year from now. Determine the sze of the replacement payment if interest is 6.1% compounded quarterly and the focal date is one
year from now.
The size of the replacement payment is S3159.34
(Round to the nearest cent as needed. Round all intemediate values to six decimal places as needed.)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
Two debts, the first of $600 due nine months ago and the second of $1700 borrowed one year ago for a term of three years at 6.3% compounded annually, are to be replaced by a single payment one year from now. Determine the size of the replacement payment if interest is 7.1% compounded quarterly and the focal date is one year from now.
A loan of R5000 is to be amortised over thirteen years by regular equal quarterly payments starting three months after the loan is granted. Interest on the loan is charged at 12,8% p.a compounded quarterly. Immediately after the fourth payment, the interest rate changes to 13% p.a. compounded quarterly. If the payments remain unchanged from the fifth payment onwards, then the new final amount ( to the nearest cent) needed to amortise the loan in the original time period, is equal to R
A loan of P12, 500 is to be repaid with equal quarterly payments for one year with an interest of 6% compounded quarterly. Find the quarterly payment and construct an amortization schedule. Semi-annual payments of P1, 350 each are used to repay a loan for 3 ½ years at 5% compounded semiannually. Find the amount of the loan and construct the first four rows of the amortization table. An obligation of P35, 000 is to be repaid with equal monthly payments for 6 months with an interest of 15% compounded monthly. Find the monthly payment and construct an amortization schedule. Mr. Santos will deposit P10, 000 at the ABC bank at the end of each quarter for 2 years. If the bank gives out 9% compounded quarterly, find the amount to his credit just after the last deposit? What monthly payment into a sinking fund at 8% compounded semi –annually will be needed to raise P50, 200 at the end of 2 years and 6 months?
A debt of 8,800 with interest at 5% payable semi annually will be discharged by payment of 1,200 at the end of each 8 periods as long as necessary, with a final smaller payment of 8 periods after the last 1200 is paid due to COVID19. How much will be the beginning amount after the last period? How much will be the final payment after the last period? How much will ve the interest after the last period? Give the amortization schedule containing the period, beginning amount, payment, interest, repayment and ending balance.
A debt of 8,800 with interest at 5% payable semi annually will be discharged by payment of 1,200 at the end of each 8 periods as long as necessary, with a final smaller payment of 8 periods after the last 1200 is paid due to COVID19. How much will be the beginning amount after the last period? How much will be the final payment after the last period? How much will ve the interest after the last period? Give the amortization schedule containing the period, beginning amount, payment, interest, repayment and ending balance. Show your solution, dont use excel
A debt of 4,400 with interest at 2.5% payable semi annually will be discharged by payment of 600 at the end of each 7 periods as long as necessary, with a final smaller payment of 7 periods after the last 600 is paid due to COVID19. How much will be the beginning amount after the last period? How much will be the final payment after the last period? How much will Be the interest after the last period? Give the amortization schedule containing the period, beginning amount, payment, interest, repayment and ending balance. Show the solution.
Directions: Solve the following problems. A loan of P40,000is to be amortized by equal payments at the end of each for 18 months. quarter I interest is 10% compounded quarterly, find the periodic payment and construct an amortization schedule.
Complete an amortization schedule for a 542, 000 loan to be repaid in equal instaliments at the end of each of the next 3 years. The interest rate is 7% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent.
Scheduled payments of $434 due two years ago and S1096 due in five years are to be replaced by two equal payments. The first replacement payment is due in three years and the second payment is due in seven years. Determine the size of the two replacement payments if interest is 1.9% compounded quarterly and the focal date is three years from now. The size of the two replacement payments is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
For this question A loan of $10,000 is to be repaid over a 2-year period through equal quarterly installments with an interest rate of 13% per year compounded quarterly. Determine the size of each installment. What would be the Verify the installment amount by filling in the amortization table.
Debts of $1250, due 3 months ago, and $500, due 3 months from today, are to be repaid with two equal payments due today and 6 months from today. Calculate the size of the two equal payments if interest is calculated at 10% per annum (p.a.), and the agreed focal date is in 6 months. Please answer it only correct.