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- 3. What is the present work of the following income strings at an interest rate of 10% (All cash flows occur at year end.) Net Cash Flow $11,000 12,100 1 3 4 14,641Lewis’s management has been considering movingto a new downtown location, and they are concerned that these plans may come to fruition priorto the equipment lease’s expiration. If the moveoccurs then Lewis would buy or lease an entirelynew set of equipment, so management wouldlike to include a cancellation clause in the leasecontract. What effect would such a clause haveon the riskiness of the lease from Lewis’s standpoint? From the lessor’s standpoint? If you werethe lessor, would you insist on changing any ofthe other lease terms if a cancellation clause wereadded? Should the cancellation clause containprovisions similar to call premiums or any restrictive covenants and/or penalties of the type contained in bond indentures? Explain your answer.Moving to the next qution presents chunges to this anower, Question 1 A loan with a simple annual nterest rate of to te repaid in 5 yeurs The tetal interest pad on thie loan is calcuated to be 1500. ow T wa orgnaly bowed S O$2.35 O S1,706 O 51.667
- 5. It is a common practice in lending companies that the interest is deducted at the time money is borrowed. Mr. Anito applied a loan amount of P 50,000 with an interest rate of 16% per year. During the time he received the money, the 16% interest is being deducted and he received only P 42,000. At the end of one year, Mr. Anito has to pay P 50,000. What is the actual rate of interest?Calculate the following rates a)the nomial rate . which equivalent to 9 %. effective sates, companded monthly the effective sate equivalent ddily that to 12/ comp oundedFact 21 Eileen has 2.5% of her earnings deposited into her retirement plan. If $150 per month is deposited in the plan, find ner monthly and yearly earnings. 8. Her monthly earnings are $ (Round to the nearest cent as needed.) Her yearly earnings are $ (Round to the nearest cent as needed.) 09 C.SU7 365 https://xlitemprod.pearsoncmg.com/api/v1/print/math
- A businessman borrowed $1,900,000 from the bank to finance new equipment for his food co-packing factory. The loan is to be paid back in uniform annual payments at an annual interest rate of 4% over 24 years. Calculate the uniform annual payments OA. $127,870 OB. $129,580 O C. $45,600 D. $48,640 OE. $124,640 EXIB2.b Determine the principal that would have to be invested toprovide $200 of simple interest income at the end of two years ifthe annual interest rate is 9%. include a cash flow- A couple has a $475,000 mortgage amortized over 30 years with monthly payments. They chose to lock in a rate of j2-4% for the first 5 years. a) Calculate their original mortgage payment (rounded up to the next cent). b) Calculate the balance remaining after five years. c) Calculate their new monthly payment (rounded up to the next cent) if they refinance at j2-5% after the first five years are up. d) How much interest did they pay during the first 5 years?
