1. Caden visits a bank and wanted to borrow some money to start for a printingpress business. He has given two options: P50,000 at a simple interest rate of 10%for 3 years or P30,000 at a 5% simple interest rate good for 10 years. If he's goingto ask you now, what options are you going to choose and recommend to him andwhy?

SIMPLE INTEREST Simple Interest is the easy & Quick method of Calculation of Interest…

Answered: 1. Caden visits a bank and wanted to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Please provide working to the solution for the question below: You have just graduated and need money to buy a new car. Your rich Uncle Chan will lend you the money so long as you agree to him back within four years, and you offer to pay him the rate of interest that he would otherwise get by putting his money in a savings account. Based on your earnings and living expenses, you think you will be able to pay him RM5,000 in one year, and then RM8,000 each year for the next three years. If Uncle Chan would otherwise earn 6% per year on his savings, how much can you borrow from him?
A friend asks to borrow $50 from you and in return will pay you $53 in one year. If your bank is offering a 6.2% interest rate on deposits and loans: a. How much would you have in one year if you deposited the $50 instead? b. How much money could you borrow today if you pay the bank $53 in one year? c. Should you loan the money to your friend or deposit it in the bank? a. How much would you have in one year if you deposited the $50 instead? If you deposit the money in the bank today you will have $ in one year. (Round to the nearest cent.) b. How much money could you borrow today if you pay the bank $53 in one year? You will be able to borrow S today. (Round to the nearest cent.) c. Should you loan the money to your friend or deposit it in the bank? (Select from the drop-down menu) From a financial perspective, you should as it will result in more money for you at the end of the year.
< A friend asks to borrow $51 from you and in return will pay you $54 in one year. If your bank is offering a 6.2% interest rate on deposits and loans: a. How much would you have in one year if you deposited the $51 instead? b. How much money could you borrow today if you pay the bank $54 in one year? c. Should you loan the money to your friend or deposit it in the bank?
A friend asks to borrow $47 from you and in return will pay you $50 in one year. If your bank is offering an 6.5% interest rate on deposits and loans: a. How much would you have in one year if you deposited the $47 instead? b. How much money could you borrow today if you pay the bank $50 in one year? c. Should you loan the money to your friend or deposit it in the bank? a. How much would you have in one year if you deposited the $47 instead? If you deposit the money in the bank today you will have $____ in one year. (Round to the nearest cent.)
A friend asks to borrow $53.00 from you and in return will pay you $56.00 in one year. If your bank is offering a 5.7% interest rate on deposits and loans: a. How much would you have in one year if you deposited the $53.00 instead? b. How much money could you borrow today if you pay the bank $56.00 in one year? c. Should you loan the money to your friend or deposit it in the bank? a. How much would you have in one year if you deposited the $53.00 instead? If you deposit the $53.00 in the bank today, you will have $ in one year. (Round to the nearest cent.)
4. You are thinking of buying house for $70,000. The house will be worth $100,000 in five years. A. Should you buy the lot if r = 0.05? (r= interest rate a bank would pay you) B. Should you buy it if r = 0.10? (r= interest rate a bank would pay you)
A friend asks to borrow $55 from you and in return will pay you $58 in one year. If your bank is offering a 5.5% interest rate on deposits and loans: How much would you have in one year if you deposited the $55 instead? How much money could you borrow today if you pay the bank $58 in one year? Should you loan the money to your friend or deposit it in the bank?
A friend asks to borrow $55 from you and in return will pay you $58 in one year. Ifyour bank is offering a 6% interest rate on deposits and loans: How much would you have in one year if you deposited the $55 instead? How much money could you borrow today if you pay the bank $58 in one year? Should you loan the money to your friend or deposit it in the bank?
you are a lender. suppose you have savings. your friends approached you and asked if you can lend him P23,000 for his tuition fee payment. he said he is willing to pay 6% interets per annym payable in 6 months. You agreed with the term. How much interest should your friend pay you after 6 months? How much is the total amount you should recieve after 6 months?
You have to decide whether to invest $100 in a friend's enterprise, where in a year's time the money will increase to $130. You have agreed that your friend will then repay you $120, keeping $10 for himself But instead he may choose to run away with the whole $130. Any of your money that you don't invest in the enterprise you can invest elsewhere safely at the prevailing rate of interest r and get $100 (1+r) next year. For interest rate r> __A___% there is an equilibrium outcome of the infinitely repeated game in which each period you invest with your friend and he repays as agreed. If the rate of interst is 10% per year, an alternative profit-splitting agreement giving $__B___ for the friend is an equilibrium outcome of the infinitely repeated game, where each period you invest with your friend and he repays as agreed. Answer A= ? Answer B= ?
A friend asks to borrow $51 from you and in return will pay you $54 in one year. If your bank is offering a 6.3% interest rate on deposits and loans: How much would you have in one year if you deposited the $51 instead? How much money could you borrow today if you pay the bank $54 in one year?
You are in desperate need of cash and turn to your uncle who has offered to lend you some money. You decide to borrow $1,300 and agree to pay back $1,500 in two years. What is the implied rate in this transaction?

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