Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter B, Problem 9E
To determine
Identify the cost of automobile.
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A computer chip designer purchased a car for $59,476.47, which includes sales tax and registration. The designer obtains a 5-year loan for the total amount at an annual interest rate of 6.3% compounded monthly. The designer will make monthly payments. The payments calculation for this type of loan uses the formula for the present value of which type of annuity?
Given the formula for the payment amount of annuity where PMT is the payment amount in dollars, PV is the present value in dollars, n is the number of payments, and i is the interest rate per period.
PMT= ?
Determin the following values.
PV= $
n=
i=
What is the designer’s monthly payment? (Round your answer to the nearest cent.)
The terms of a loan call for monthly payments for 6 years at 9.6 percent interest. If you borrow $18,800 to purchase a new car, what is the amount of each payment?
Find the monthly house payment necessary to amortize the following loan.
9) In order to purchase a home, a family borrows $121,000 at 3.0% for 30 yr. What is their
monthly payment? Round the answer to the nearest cent.
Chapter B Solutions
Principles of Financial Accounting.
Ch. B - Prob. 1QSCh. B - Prob. 2QSCh. B - Prob. 3QSCh. B - Prob. 4QSCh. B - Prob. 5QSCh. B - Beene Distributing is considering a project that...Ch. B - Prob. 7QSCh. B - Prob. 1ECh. B - Prob. 2ECh. B - Prob. 3E
Ch. B - Prob. 4ECh. B - Prob. 5ECh. B - Prob. 6ECh. B - Prob. 7ECh. B - Number of periods of an investment Keith Riggins...Ch. B - Prob. 9ECh. B - Prob. 10ECh. B - Prob. 11ECh. B - Prob. 12ECh. B - Prob. 13ECh. B - Prob. 14ECh. B - Prob. 15ECh. B - Future value of an annuity Kelly Malone plans to...Ch. B - Prob. 17ECh. B - Practical applications of the time value of money...Ch. B - Using present and future value tables For each of...
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- Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?arrow_forwardCalculating single-payment loan amount due at maturity. Stanley Price plans to borrow 8,000 for five years. The loan will be repaid with a single payment after five years, and the interest on the loan will be computed using the simple interest method at an annual rate of 6 percent. How much will Stanley have to pay in five years? How much will he have to pay at maturity if hes required to make annual interest payments at the end of each year?arrow_forwardCalculating and comparing add-on and simple interest loans. Eli Nelson is borrowing 10,000 for five years at 7 percent. Payments, which are made on a monthly basis, are determined using the add-on method. a. How much total interest will Eli pay on the loan if it is held for the full five-year term? b. What are Elis monthly payments? c. How much higher are the monthly payments under the add-on method than under the simple interest method?arrow_forward
- What is the monthly payment for a home costing $475,000 with a 20% down payment and the balance financed for 30 years at 6.5%? (a) State the type. A. present valueB. future value C.ordinary annuityD.amortizationEsinking fund (b) Answer the question. (Round your answer to the nearest cent.)arrow_forwardFinancearrow_forwardYou would like to buy a new car and will need to borrow $25,000 to do so. Your loan will be repaid monthly over 6 years at a 5% annual interest rate. Calculate your monthly payment. N (period of time) I (Interest) PV (Present Value) FV (Future Value) PMT (Annuity) Prepare the loan amortization schedule. Period Monthly Payment Interest Expense Principal Payment Principal Balancearrow_forward
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- Which of the following is an annuity? Group of answer choices A car loan that has a $400 per month payment for five years. A $1 million business loan that the borrower repays over twenty years by making the same quarterly payment. A fixed-rate home mortgage that has a monthly payment of $1,000 and lasts 30 years. All of the above A student loan that requires the borrower to repay the same monthly amount over a 15-year period.arrow_forwardYou are buying your first car and have taken out a loan to fund the purchase. The terms of the loan are provided below: Loan amount $ 20,000 Annual interest rate 5% Loan type Amortizing Loan duration in years 5 Repayment frequency Annual repayments First repayment 1 year’s time c) Calculate the following: i) The annual loan repayment. ii) The total amount of dollar repayments to be made over the duration of the loan. iii) The total interest in dollars to be paid over the duration of the loanarrow_forwardWhat is the value of a 30-year annuity that pays $2500 a year? The annuity’s first payment will be received on year 11. Also, assume that the annual interest rate is 4 percent for years 1 through 10 and 5 percent hereafter.arrow_forward
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