HomeworkLib
Question

Travis International has a debt payment of $2.19 million that it must make 3 years from...

Travis International has a debt payment of $2.19 million that it must make 3 years from today. The company does not want to come up with the entire amount at that time, so it plans to make equal monthly deposits into an account starting 1 month from now to fund this liability. If the company can earn a return of 4.58 percent compounded monthly, how much must it deposit each month?

Multiple Choice

  • $56,649.38

  • $58,130.32

  • $56,865.59

  • $60,833.33

  • $60,656.63

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Monthly rate = 4.58% / 12 = 0.381667%

Number of periods = 3 * 12 = 36

Future value = Monthly payments * [(1 + r)n - 1] / r

2,190,000 = Monthly payments * [(1 + 0.00381667)36 - 1] / 0.00381667

2,190,000 = Monthly payments * [1.146987 - 1] / 0.00381667

2,190,000 = Monthly payments * 38.511867

Monthly payments = $56,865.59

0 0
Add a comment
Know the answer?
Add Answer to:
Travis International has a debt payment of $2.19 million that it must make 3 years from...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Travis International has a debt payment of $2.16 million that it must make 4 years from...

    Travis International has a debt payment of $2.16 million that it must make 4 years from today. The company does not want to come up with the entire amount at that time, so it plans to make equal monthly deposits into an account starting 1 month from now to fund this liability. If the company can earn a return of 4.43 percent compounded monthly, how much must it deposit each month?

  • Travis International has a debt payment of $2.36 million that it must make 4 years from...

    Travis International has a debt payment of $2.36 million that it must make 4 years from today. The company does not want to come up with the entire amount at that time, so it plans to make equal monthly deposits into an account starting 1 month from now to fund this liability. If the company can earn a return of 5.43 percent compounded monthly, how much must it deposit each month?

  • To fund your dream around-the-world vacation, you plan to save $1,250 per year for the next...

    To fund your dream around-the-world vacation, you plan to save $1,250 per year for the next 12 years starting one year from now. If you can earn an interest rate of 5.71 percent, how much will you have saved for your vacation? Multiple Choice o $18,431.38 o $20,018.86 o $19,832.35 o О $20,73382 $20,733.82 o $19,582.60 The value of the following cash flows four years from today is $8,487.54. The interest rate is 5.6 percent. What is the value of...

  • A company has a pension liability of $460,000,000 that it must pay in 29 in years....

    A company has a pension liability of $460,000,000 that it must pay in 29 in years. If it can earn an annual interest rate of 4.2 percent, how much must it deposit today to fund this liability? Multiple Choice O $133,883,255.09 Ο $139,506.351.81 Ο Ο 44,08571.14 Ο $11755.30770 ( $121423,867.90

  • 1. Suppose you accumulated $500,000, perhaps from many years of saving. You put the money in...

    1. Suppose you accumulated $500,000, perhaps from many years of saving. You put the money in a savings plan earning 6% compounded monthly. If you want to withdraw $4,000 at the beginning of each month, how long before the savings plan is exhausted? 2. Suppose you accumulated $500,000, perhaps from many years of saving. You put the money in a savings plan earning 6% compounded monthly. If you want the plan to last 40 years, how much can you withdraw...

  • A: What is the amount of the payments that Henry Winslow must make at the end...

    A: What is the amount of the payments that Henry Winslow must make at the end of each of 8 years to accumulate a fund of $86,200 by the end of the 8th year, if the fund earns 8% interest, compounded annually? B: Morgan Hitchcock is 39 years old today and he wishes to accumulate $513,000 by his 63rd birthday so he can retire to his summer place on Lake Hopatcong. He wishes to accumulate this amount by making equal...

  • A: What is the amount of the payments that Henry Winslow must make at the end...

    A: What is the amount of the payments that Henry Winslow must make at the end of each of 8 years to accumulate a fund of $86,200 by the end of the 8th year, if the fund earns 8% interest, compounded annually? B: Morgan Hitchcock is 39 years old today and he wishes to accumulate $513,000 by his 63rd birthday so he can retire to his summer place on Lake Hopatcong. He wishes to accumulate this amount by making equal...

  • The Nashville Geetars, a professional foosball team, has just signed its star player Harold "The Wrist"...

    The Nashville Geetars, a professional foosball team, has just signed its star player Harold "The Wrist" Thornton to a new contract. One of the terms requires the team to make a lump sum payment of $13.19 million to the The Wrist exactly 10 years from today. The team plans to make equal annual deposits into an account that will earn 4.87 percent in order to fund the payment. How much must the team deposit each year? You have just leased...

  • You want to retire exactly 30 years from today with $1,980,000 in your retirement account. If you think you can earn an...

    You want to retire exactly 30 years from today with $1,980,000 in your retirement account. If you think you can earn an interest rate of 10.19 percent compounded monthly, how much must you deposit each month to fund your retirement?

  • You want to retire exactly 35 years from today with $1,930,000 in your retirement account. If...

    You want to retire exactly 35 years from today with $1,930,000 in your retirement account. If you think you can earn an interest rate of 9.99 percent compounded monthly, how much must you deposit each month to fund your retirement? A) $4,595.24 B) $505.45 C) $509.66 D) $543.64 E) $594.79

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT