Homework Answers
![1) This can be solved using the Present value of annuity formula Present value of annuity is-(P(1-(1)-n)/r) P is Equal Payment made in each vear? r is Rate of Interest = 9% n is No of years -4 Present value of annuity is = $ 37,310/ 37310-(P1-(1+0.09)A-4))/0.09) 37310-(P .291574789/0.09)) 37310-(P*3.239719877) P is 37310/3.239719877 P is- S11,516.43/. Approx. Each year Sunland Pays $ 11,516.43/. Approx. 2) Given that the Present Payment is S 26,000/. Which is assumed as worth of the Honds Acura This can be solved using the Present value of annuity formula Present value of annuity is-(P (1-(1+1)-n)/r) P is Equal Payment made in each year S 6,500/ I is Rate of Interest? n is No of years -5 Present value of annuity is $26,000/ 26000 (6500*((1-(1+1)A-n))/r (1-(1+1)-n/- (26000/6500) ((1-(1+r)^-n))/r = 4 (1-(1+r)A-n)-4T Using Trail and Error method, r is computed as 8.02% Approx. Effective interest rate-8.02% Approx. 3) This can be solved using the Present value of annuity immediate Present value of annuity immediate P+[P1-(1)A-(n-1))/r)] P is Yearly payment -S 6,420/ r is Rate of Interest 590 n No of years 24 years Present value of annuity immediate 6420+[6420(1-(1+0.05)A-(24-1))/0.05)] Present value of annuity immediate 6420+(6420*(0.674428694/0.05)] Present value of annuity immediate 6420+[6420 13.48857388] Present value of annuity immediate 6420+86596.64434 Present value of annuity immediate -S 93,016.64/. Approx. Amount in the Fund in 24 years- $93,016.64/](http://img.homeworklib.com/questions/5f6a41d0-4d80-11ea-a074-5b8df44e790f.png?x-oss-process=image/resize,w_560)
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1. Sunland, Inc. owes $37,310 to Cxiitter Company. How much would Sunland have to pay each...
Sunland, Inc. owes $37,310 to Criitter Company. How much would Sunland have to pay each year...
Sunland, Inc. owes $37,310 to Criitter Company. How much would Sunland have to pay each year if the debt is retired through four equal payments (made at the end of the year), given an interest rate on the debt of 9%? Amount paid each year Answer . (round to whole dollars) You are interested in purchasing a Honda Acura. The salesperson indicated that the price of the car was either $26,000 cash or $6,500 at the end of each of...
2. You are interested in purchasing a Honda Acura. The salesperson indicated that the price of...
2. You are interested in purchasing a Honda Acura. The salesperson indicated that the price of the car was either $26,000 cash or $6,500 at the end of each of 5 years. Compute the effective-interest rate to the nearest percent that you will pay if you choose to make the five annual payments. (Round answer to 0 decimal places, e.g. 79%) Interest Rate Answe 3. Mickey Michen will invest $6,420 a year for 24 years in a fund that will...
Question 18 Recently, Julia Estes was interested in purchasing a Honda Acura. The salesperson indicated that...
Question 18 Recently, Julia Estes was interested in purchasing a Honda Acura. The salesperson indicated that the price of the car was either $25,000 cash or $6,300 at the end of each of 5 years. Compute the effective-interest rate to the nearest percent that Julia would pay if she chooses to make the five annual payments. (Round answer to 0 decimal places, e.g. 7%.) Interest rate %??
Recently, Candice Estes was interested in purchasing a Honda Acura. The salesperson indicated that the price...
Recently, Candice Estes was interested in purchasing a Honda Acura. The salesperson indicated that the price of the car was either $28,900 cash or $7,400 at the end of each of 5 years. Compute the effective-interest rate to the nearest percent that Candice would pay if she chooses to make the five annual payments. (Round answer to o decimal places, eg. 7%.) Click view factor tables Interest rate 8
4. Mr. Jones is in debt. He owes Mr. James an amount of $235,000. To repay...
4. Mr. Jones is in debt. He owes Mr. James an amount of $235,000. To repay this debt he is to pay an amount of X for the next 7 years and an amount of 2X for the following 15 years. All payments are made at the end of the year. The annual interest rate is 12%. Calculate X.
Exercise 3 if you invest $4000 each year for 40% years, how much will you have...
Exercise 3 if you invest $4000 each year for 40% years, how much will you have at the end of 40 years assuming a 9% annual return? Exercise 4 if you want to withdraw $35000 each year for 30 years, how much would you need to have saved today to fund these withdrawals? (Assume 7% annual return) Exercise 5 if you purchase a machine and borrow $30000, what will your approximate monthly payment be if you pay back the loan...
(20 points) You borrow $3000 for four years at an annual effective interest rate of i....
(20 points) You borrow $3000 for four years at an annual effective interest rate of i. The investor pays interest only on the loan at the end of each year and accumulates the amount necessary to repay the principal at the end of four years by making level payments at the end of each year into a sinking fund (an account used to accumulate money needed to pay back a debt). The sinking fund earns an annual effective interest rate...
Wiseman Video plans to make four annual deposits of $6,500 each to a special building fund. The fund’s assets will be invested in mortgage instruments expected to pay interest at 12% on the fund’s balance. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD o
Wiseman Video plans to make four annual deposits of $6,500 each to a special building fund. The fund’s assets will be invested in mortgage instruments expected to pay interest at 12% on the fund’s balance. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)Determine how much will be accumulated in the fund on December 31, 2024 after four years, under each of the...
Sunland Company leases a building to Walsh, Inc. on January 1, 2017. The following facts pertain...
Sunland Company leases a building to Walsh, Inc. on January 1, 2017. The following facts pertain to the lease agreement. The lease term is 5 years, with equal annual rental payments of $4,068 at the beginning of each year. 1. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 2. The building has a fair value of $20,200, a book value to Sunland...
(1 point) A company borrows $200000, which will be paid back to the lender in one...
(1 point) A company borrows $200000, which will be paid back to the lender in one payment at the end of 12 years. The company agrees to pay monthly interest payments at the nominal annual rate of 8% compounded monthly. At the same time the company sets up a sinking fund in order to repay the loan at the end of 12 years. The sinking fund pays interest at an annual nominal interest rate of 4% compounded monthly. Find the...
2. You are interested in purchasing a Honda Acura. The salesperson indicated that the price of the car was either $26,000 cash or $6,500 at the end of each of 5 years. Compute the effective-interest rate to the nearest percent that you will pay if you choose to make the five annual payments. (Round answer to 0 decimal places, e.g. 79%) Interest Rate Answe 3. Mickey Michen will invest $6,420 a year for 24 years in a fund that will...
Recently, Candice Estes was interested in purchasing a Honda Acura. The salesperson indicated that the price of the car was either $28,900 cash or $7,400 at the end of each of 5 years. Compute the effective-interest rate to the nearest percent that Candice would pay if she chooses to make the five annual payments. (Round answer to o decimal places, eg. 7%.) Click view factor tables Interest rate 8
4. Mr. Jones is in debt. He owes Mr. James an amount of $235,000. To repay this debt he is to pay an amount of X for the next 7 years and an amount of 2X for the following 15 years. All payments are made at the end of the year. The annual interest rate is 12%. Calculate X.
(20 points) You borrow $3000 for four years at an annual effective interest rate of i. The investor pays interest only on the loan at the end of each year and accumulates the amount necessary to repay the principal at the end of four years by making level payments at the end of each year into a sinking fund (an account used to accumulate money needed to pay back a debt). The sinking fund earns an annual effective interest rate...
Sunland Company leases a building to Walsh, Inc. on January 1, 2017. The following facts pertain to the lease agreement. The lease term is 5 years, with equal annual rental payments of $4,068 at the beginning of each year. 1. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. 2. The building has a fair value of $20,200, a book value to Sunland...
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