13. Creating an amortization schedule Aa Aa Ian loaned his friend $45,000 to start a new...
Ian loaned his friend $45,000 to start a new business. He considers this loan to be an investment, and therefore requires his friend to pay him an interest rate of 7% on the loan. He also expects his friend to pay back the loan over the next four years by making annual payments at the end of each year. Ian texted and asked that you help him calculate the annual payments that he should expect to receive so that he...
fill in the blanks based on info Back to Assignment Attempts: keep the Highest: 1 14. Loan amortization and capital recovery Tan loaned his friend $20,000 to start a new business. He considers this loan to be an investment, and therefore requires his friend to pay him an interest rate of 7% on the loan. He also expects his friend to pay back the loan over the next four years by making annual payments at the end of each year,...
Hell with these three questions please. 10. Uneven cash flows Aa Aa E A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the concept of the time value of money will continue to apply. Consider the following case: The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next five years: Year 1 $250,000 Annual Cash Flows Year...
Amortization schedule. Chuck Ponzi has talked an elderly woman into loaning him $45,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $45,000 with an annual interest rate of 7% over the next 5 years. Ponzi may choose to pay off the loan early if interest rates change during the next 5 years. Determine the ending balance of the loan each year under the...
14. Loan amortization and capital recovery After Shipra got a job, the first thing she bought was a new car. She took out an amortized loan for $20,000—with no ($0) down payment. She agreed to pay off the loan by making annual payments for the next four years at the end of each year. Her bank is charging her an interest rate of 6% per year. Yesterday, she called to ask that you help her compute the annual payments necessary...
Monty loaned his friend Ned $19,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remaining balance was $14,250, Ned filed for bankruptcy and notified Monty that he would be unable to pay the balance on the loan. Monty treated the $14,250 as a nonbusiness bad debt. Last year before considering the tax implications of the nonbusiness bad debt, Monty had capital gains of $5,700 and taxable income of $33,250. During the...
Mr. Parker is creating a college fund for his daughter. He plans to make 13 yearly payments with the first payment of $4000 today on his daughter’s fifth birthday and to increase each payment by 5%. Also, He would expect to earn a 10% annual return on his investment and his daughter will need four withdrawals from this account to pay for her education beginning when she is 18 (i.e. 18, 19, 20, 21). If the cost of college education...
Problem 6-12 (Algorithmic) (LO. 1) Monty loaned his friend Ned $23,000 three years ago. Ned signed a note and made payments on the loan. Last year, when the remaining balance was $17,250, Ned filed for bankruptcy and notified Monty that he would be unable to pay the balance on the loan. Monty treated the $17,250 as a nonbusiness bad debt. Last year before considering the tax implications of the nonbusiness bad debt, Monty had capital gains of $6,900 and taxable...
9. Present value of annuities and annuity payments Aa Aa The present value of an annuity is the sum of the discounted value of all future cash flows. You have the opportunity to invest in several annuities. Which of the following 10-year annuities has the greatest present value (PV)? Assume that all annuities earn the same positive interest rate. O An annuity that pays $500 at the beginning of every six months O An annuity that pays $500 at the...
Amortization Schedule - Sample Problem Brittany plans to borrow $450,000 to buy a condo. She will repay the loan with level payments over a 20 year period beginning one month after the loan is made. To seal the deal, she received an inducement from the builder in which it will pay her first 3 years of loan interest. The nominal interest rate on the loan is 6% compounded monthly a.) How much is the value of the inducement? b.) How...