Arabella converted her loan to light payments which gives her an option to pay 12,000 every 2 years for 6 years .The first payment is due to 4 years from now .How much is the amount of the loan if the interest rate is 10% converted every 2 years? Exercise 1: Arabella converted her loan to light payments which gives heran option to pay P12,000 every 2 years for 6 years. The first payment isdue 4 years from now. How much is the amount of the loan if the interestrate is 10% converted every 2 years?

Present Value of annuity refers to the today's value of cash flows of a series of equal cash flows…

Arabella converted her loan to light payments which gives her an option to pay 12,000 every 2 years for 6 years .The first payment is due to 4 years from now .How much is the amount of the loan if the interest rate is 10% converted every 2 years?

Arabella converted her loan to light payments which gives her an option to pay 12,000 every 2 years for 6 years .The first payment is due to 4 years from now .How much is the amount of the loan if the interest rate is 10% converted every 2 years?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 11E

See similar textbooks

Related questions

Q: What is the difference between a fixed rate and an adjustable rate money market instrument?

A: Money Market instruments are the financial instruments available to the investor for the short term ...

Q: Here is a table of call option quotes on Nike (NKE) from CBOT on 26 February 2019. On that day NKE t...

A: The call gives right to buy the stock on expiration but no obligation to do that and there is benefi...

Q: Find the compound interest if $2000 is invested for 12 years at 8% compounded quarterly. $3036 $1920...

A: Compound interest is the amount of interest which is charged or received on the principal or interes...

Q: An all equity corporation has net income of $63,313and a required rate of return of 0.14%. What woul...

A: Given: Net income = 63313 Require rate of return = 0.14%

Q: Suppose the current USD/euro exchange rate is 1.2000 dollars per euro. The six-month forward exchang...

A: Exchange rate (ER) is a value at which two different currencies are exchanged or traded. To estimate...

Q: An annuity that pays $13,000 a year at an annual interest rate of 4.42 percent costs $140,000 today....

A: Annual payment (P) = $13000 Interest rate (r) = 4.42% Present value (PV) = $140,000 Period = n

Q: Which of the following measures reflects the excess return earned on a portfolio per unit of its sys...

A: Treynor's measure is the measure of excess return earned per unit of beta of portfolio. Treynor Ra...

Q: Canliss Mining Company borrowed money from a local bank. The note the company signed requires five a...

A: Present value of annuity is the current value of the future payments that are calculated using the i...

Q: A company is considering constructing a plant to manufacture a proposed new product. The land costs ...

A: MARR (Minimum Acceptable Rate of Return) is the return which will be considered by the company bef...

Q: The nominal interest rate is adjusted based on _______ from the real interest rate.

A: Nominal interest rate is that interest rate before taking inflation into account. On the other hand ...

Q: You can earn $59 in interest on a $1,000 deposit for eight months. If the EAR is the same regardless...

A: Effective Annual Rate: It refers to the annual real rate taking into account compounding effects. He...

Q: Analyse TWO (2) issues that manager would be facing when they consider changing a business firm's ca...

A: The capital structure of a firm refers to the exact mix of debt and equity used to finance its asset...

Q: 6. Mommy Hai-dee, Inc. as of yearend of 2019 has a Total Working Capital of Php 3,000,000.00 and wit...

A: In the book value method, we find the book value of the firm, which is considered as the value of th...

Q: feCem Deumen 20bud Risk P (Risk Probability) I (Cost Impact) Risk Contingency P*lc A .7 £20,000 .4 £...

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

Q: f market is efficient, in managing an equity portfolio, you will adopt a. Indexing strategy b. Stock...

A: An efficient market is one where the security prices reflect all information available about that se...

Q: You own a portfolio that has $1,600 invested in Stock A and $2,700 invested in Stock B. Assume the e...

A: Expected return of portfolio = (weight of stock A × Expected return of A) + (weight of stock B × Exp...

Q: Ted Williams made deposits of $500 at the end of each year for eight years. The rate is 8% compounde...

A: Annual deposit (P) = $500 Interest rate (r) = 8% Period (n) = 8 Years

Q: One-year T-bills yield 1.00%. Based on future rates, the market expects that one year from now, new ...

A: Pure Expectations Theory (PET) is used to compute the future rates because this theory defines that ...

Q: When the annual cash flows are unequal, the payback period is computed by adding the annual cash flo...

A: Year Annual cf Cumulative cf 1 20000 20000 2 30000 50000 3 40000 90000 4 50000 140000 5 60...

Q: Is there a difference between arithmetic and geometric average returns? Is it true that they converg...

A: Geometric average is generally used by investment professionals to measure the performance of portfo...

Q: Mr. Bienvenido Bautista needs a fund of Php1,000,000 to renovate his house. To provide for this, he ...

A: Future value required (FV) = Php1,000,000 Interest rate = 12% Monthly interest rate (r) = 12%/12 = 1...

Q: An investment will have a future value equal to Php180,250 after 6 years. It has a nominal rate of 1...

A: Time Value of money states that each dollar has earning capacity hence a dollar today is worth more ...

Q: he current market exchange rate is 2.2 francs per pound. Suppose you need to buy 6 pounds using Fren...

A: In international business the exchange rate between the currencies play very important role in busin...

Q: roject you are considering is expected to provide benefits worth $225,000 in one year. If the risk-...

A: Present value is without the interest which is less than future value one year later.

Q: Find the present value of an investment that will have a future value of Php350,000 if it is investe...

A: Present Value: It is the current value of cash flows or an amount of money that is expected in the f...

Q: Amount Financed Number of Payments APR Table Factor Finance Charge Monthly Payment $600 18 17% $ $ ...

A: Borrowings are the liability of the company which is used to finance the requirement of the funds. T...

Q: The furniture store offers you no-money-down on a new set of living room furniture. Further, you may...

Q: Interest of $1,632 with principal of $16,000 for 306 days (ordinary interest) results in a rate of: ...

A: Interest = $1632 Principal = $16000 Period = 306 days

Q: Compute the present value of $1,000 paid in three years using the following discount rates: 6 percen...

A: Given information : Amount to be paid in three years $1,000.00 Interest rate in year 1 6% In...

Q: Your cousin has asked for your advice on whether or not to buy a bond for $995, which will make one ...

A: Here, Buying Price of Bond is $995 One Time Payment after 5 years is $1,200 Time Period is 5 years

Q: You have just received a bonus of $10,000 and are looking to deposit the money in a bank account for...

A: Value after a period can be calculated as: = Principal * (1 + Periodic Interest rate)^number of conv...

Q: You bought a car and borrowed $25,067 for 48 months. If the rate is 3.56%, what is your monthly paym...

A: Loan amount (L) = $25067 n = 48 months r = 3.56% per annum = 0.29667% per month X = Monthly payment

Q: Shawn has set up an "automatic account builder" plan with an investment company. At the end of each ...

A: The monthly deduction of $125 is an annuity. As the amounts are being deducted and deposited at the ...

Q: APPLY THE CONCEPTS: Net present value and Present value index Sutherland Engineering is looking to i...

Q: Ray Miller was looking for funds to support his company's expansion. His bank offered him a $25,000 ...

A: Discount note is one of the ways to raise the funds in the form of short term borrowings. Borrower g...

Q: Expound this statement: The Board should adopt a Code of Business Conduct and Ethics, which would p...

A: A code of ethics is a collection of rules that professionals must adhere to in order to conduct busi...

Q: A man borrowed P12,000 and agreed to repay it with P4,650.70 interest. If the interest is 6% compoun...

A: Borrowed amount (PV) = P12000 Interest amount = P4650.70 Future value (FV) = 12000+4650.70 = P16650....

Q: t the end of the year? 1. 1099 B. Schedule C C. 1040 D. W2

A: There are income from savings that you must show in the income tax return form and for that separate...

Q: What is the present value of $6,000 paid at the end of each of the next 65 years if the interest rat...

A: Annual payment (P) = $6000 Interest rate (r) = 7% Number of annual payments (n) = 65

Q: The cash price of a motorcycle is Php325,000. A fixed amount is to be paid at every end of the month...

A: Here, Cash Price of Motorcycle is Php325,000 Time Period (n) is 1.5 years Interest Rate (r) is 9% Co...

Q: A fund is to be donated by a wealthy man to provide annual scholarships to deserving students. The f...

A: An annuity is a series of cash flows that involve an equivalent periodic amount over a specific time...

Q: Find the nominal rate of an investment with duration of 4 and a half years compounded once a year. T...

A: Time period is 4.5years Present value of investment is Php50,010 Future Value is Php60,072.82 To Fin...

Q: Consider the following timeline detailing a stream of cash flows If the current market rate of i...

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified...

Q: Find the present value on January 1, 1992, of the sum which is due on the specified date, if money c...

Q: A fund is to be donated by a wealthy man to provide annual scholarships to deserving students. The f...

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one...

Q: You are interested in buying one corporate bond and your broker has offered two corporate bonds for ...

A: A bond is a monetary instrument issued by the government and companies. It offers a fixed rate of re...

Q: ch of the following defines a hedge fund the most? 1. A collective investment model based on issui...

A: Hedge fund is larger pool of investment that are collected from large number of investors and manage...

Q: ecovered investment is greater than the annual cash flow, the payback period is "1". If the unrecove...

A: Pay back period is the period required to recover the initial investment of the project.

Q: Use the table for the question(s) below. Consider the following two quotes for XYZ stock: No...

A: Number of shares purchased of XYZ Stock = 100 Date : November 18 Ask price = 26 Bid price = 25.93 ...

Q: Use the following information to answer the question below. Nielson Motors is considering an opp...

Question

Exercise 1: Arabella converted her loan to light payments which gives her
an option to pay P12,000 every 2 years for 6 years. The first payment is
due 4 years from now. How much is the amount of the loan if the interest
rate is 10% converted every 2 years?

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 3

VIEW

Step by step

Solved in 3 steps with 2 images

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

Calculating 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?
Ruth availed of a cash loan that gave her an option to pay P5,000 monthly for l year. The first payment due after 6 months. How much is the present value of the loan if the interest rate is 5% converted monthly? In the given problem, what is 5%? Annual Rate O Nominal Rate Interest rate per conversion period Rate SLIDESMANIA COM
Step 1:Suppose that your Stafford loans plus accumulated interest total $31,811 at the time that you start repayment and the interest rate is 6.8% APR.If you elect the standard repayment plan of a fixed amount each month for 10 years, what is your monthly payment?(Fill in the blank below and round your answer to 2 decimal places.)Your monthly payment would be $______. STEP 2: How much will you pay in interest?(Fill in the blank below and round your answer to the nearest whole number.)You would pay a total of $______ in interest. STEP 3: However, because your accumulated outstanding federal loans total more than $30,000, you can elect to repay over 25 years instead.Fill in the blanks (Give your answers to two decimal places):If you do that:Your monthly payment would be $______.You will pay $______ in interest.Answer 1:Answer 2:
Example 2 Brandt receives a loan of $10000 from a bank at an annual interest rate of 6% compounded monthly to be repaid in monthly installments within a 10-year period. a Determine the monthly installments in order to repay the loan on time. b Find how much she still owes after the fifth year.
Question Solve the given problem. A. Mrs. Ledesma apply for a loan for the renovation of their house. She agreed to pay P10,000 quarterly for 5 years that will start at the end of 2 years. If interest rate is 6% converted quarterly, how much is her loan? a. The type of annuity illustrated in the problem is ____________. b. The regular payment is ___________. c. The total number of payments is _________. d. Period of deferral is ________. e. The interest rate per period is ___________. f. The present value of the loan is ___________. B. Your mother plans to buy you laptop for your online class. She got an offer from Abenson of monthly installment of 1,950 monthly for 1 year and a down payment of 5,500. The payment will start at the end of 3 months. How much is the cash price of the laptop if the interest rate is 3% compounded monthly. a. The type of annuity illustrated in the problem is ____________. b. The regular payment is ___________. c. The total number of payments is _________.…
Pauline borrows a loan of 120000 for 3 years at 11.5% simple interest Calculate the total interest due on the loan If she is required to reply in monthly installments how much how much would she repay per month? What is the banks profit as a percentage of the loan accounts.
K For how long will Logan have to make payments of $322 at the end of every year to repay a loan of $2470 if interest is 9% per annum compounded monthly? State your answer in years and months (from 0 to 11 months) He will have to make payments for year(s) and month(s) CHED-
You decide to finance a $21,000.00 car at a 4% interest rate for 4 years.A. How much will your monthly payment? My payment will be $______ a month B. How much interest will you pay over the life of the loan? I wil pay $______ in interest over the life of the loan
If a borrower has a loan of $10000 at i=10% compound interest, and should return to the bank the interest plus one quarter at the end of each year up to 5 years, he will finish the payments at: Select one: a. The end of 5 year b. The end of 3 year C. The end of 2 year d. The end of 4 year
Don Magellan borrowed today from Ginoong Magellan P300,000.00 and agreed to repay the loan with 4 equal monthly amounts, the first payment to start 1 month from today. How much is the value of the equal monthly payment? Construct an amortization schedule. Use interest rate at 12 % compounded monthly.
Problem 2. Dianne is planning to buy a house and lot. The required down payment is P300,000. Her balance will be paid at P 15,200 every month for 20 years. If money is 10% compounded monthly, how much is the cash value of the house and lot? Problem 3. In a monthly payment of P 1,000 for 9 years that will start 9 months from now, find the period of deferral.
A person borrows an amount for a new house and s/he is going to make monthly payments of 8,000 $ for the next 10 years. The nominal annual interest rate is quoted as 12%. (Assume the first instalment is going to be paid 1 month after s/he borrows.) a. Find the amount borrowed by this person. o. How much does this credit worth at the end of the last payment date? c.lf this person decides on closing his/her loan after paying the 34th instalment, how much should s/he pay? It is given that the closing fee of this credit is 1,453 $.