Lorena's Cart took out a loan from the bank today for $245,600.00. The loan requires Lorena's Cart to make a special payment of $86,000.00 to the bank in 4 years and also make regular, fixed payments of X to the bank each year forever. The interest rate on the loan is 11.60 percent per year and the first regular, fixed annual payment of X will be made to the bank in 1 year. What is X, the amount of the regular, fixed annual payment? O $55,442.36 (plus or minus 3 dollars) O $18,513.60 (plus or minus 3 dollars) O $22,058.29 (plus or minus 3 dollars) O $28,489.60 (plus or minus 3 dollars) none of the answers are within 3 dollars of the correct answer

Lorena's Cart took out a loan from the bank today for $245,600.00. The loan requires Lorena's Cart to make a special payment of $86,000.00 to the bank in 4 years and also make regular, fixed payments of X to the bank each year forever. The interest rate on the loan is 11.60 percent per year and the first regular, fixed annual payment of X will be made to the bank in 1 year. What is X, the amount of the regular, fixed annual payment? O $55,442.36 (plus or minus 3 dollars) O $18,513.60 (plus or minus 3 dollars) O $22,058.29 (plus or minus 3 dollars) O $28,489.60 (plus or minus 3 dollars) none of the answers are within 3 dollars of the correct answer

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2P: Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for...

See similar textbooks

Similar questions

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)?
Zach Taylor is settling a $20,000 loan due today by making 6 equal annual payments of $4,727.53. Determine the interest rate on this loan, if the payments begin one year after the loan is signed.
You borrow $11,000 from the bank at an interest rate of 6%, compounded annually. You are required to make 10 equal end of-year payments to pay off the loan. a) What is the amount of these equal payments? b) What is the amount of the 10 payments if the first payment is not made until 3 years after receipt of the money?
ABC bank loans $250,000 to Yossarian to purchase a new home. Yossarian will repay the note in equal monthly payments over a period of 30 years. The interest rate is 12 percent. Required: If the monthly payment is $2,571.53, how much of the first payment is interest expense, and how much is principal repayment?\
Asma has borrowed $1,000,000 from MQ Bank for 10 years at an interest rate of j2=4.67% p.a. She will make 10 annual repayments. According to the loan agreement, Asma's repayments will be $83,000 for the first two years followed by payments of X per year for the remaining eight years. This loan needs to be fully repaid by the end of 10 years. (b) Assume that all annual repayments will be paid at the beginning of each year (the first payment will be at the start of the first year), what is the value of Asma's annual payment amount, X (rounded to four decimal places)? Question 7Answer a. 134233.5495 b. 128177.7626 c. 127887.4496 d. 133859.7935
Gloria borrows P100,000 from a lending institution which changes an interest rate of 16% compounded annually. Equal payments are to be made over 5 years starting immediately. How much will the annual payment be?
Jack has borrowed $1,000,000 from MQ Bank for 10 years at an interest rate of j₂=3.47%. He will make 10 annual repayments. According to the loan agreement, Jack's repayments will be $89,000 for the first two years followed by payments of with the amount of X per year for the remaining eight years. This loan needs to be fully repaid by the end of 10 years. (a) Assume that all annual repayments will be paid at the end of each year (the first payment will be at the end of the first year), what is the value of Jacks' annual payment amount X (rounded to four decimal places)? a. 120881.0561 b. 129241.8018 O c. 129491.0651 O d. 120718.5766 Jack has borrowed $1,000,000 from MQ Bank for 10 years at an interest rate of j2=3.47%. He will make 10 annual repayments. According to the loan agreement, Jack's repayments will be $89,000 for the first two years followed by payments of with the amount of X per year for the remaining eight years. This loan needs to be fully repaid by the end of 10 years.…
Excellent bank has offered you, a GHC 60,000 35year loan to purchase an equipment in your Factory. The loan payments are to be made on monthly basis. The total payment at the end of the thirty five -year period is $ 134,964.00. Determine the effective annual interest rate if the interest is compounded continuously