Bonita intends to open a small fabric shop and borrows the money for it from her aunt Magda. Bonita feels that she will only be able to start repaying her debt after three years. Bonita will then pay aunt Magda R105 000 per year for five years. Money is worth 19,5% per year. The present value of Bonita’s debt at the time she will start paying aunt Magda back is [1] R408 978,93. [2] R317 500,78. [3] R222 924,04. [4] R525 000,00. [5] R436 649,07.

Bonita intends to open a small fabric shop and borrows the money for it from her aunt Magda. Bonita feels that she will only be able to start repaying her debt after three years. Bonita will then pay aunt Magda R105 000 per year for five years. Money is worth 19,5% per year. The present value of Bonita’s debt at the time she will start paying aunt Magda back is [1] R408 978,93. [2] R317 500,78. [3] R222 924,04. [4] R525 000,00. [5] R436 649,07.

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 13E

See similar textbooks

Similar questions

Emma plans to loan $1,000 to her friend, who will pay a simple interest rate of 5.8% every year for the loan. If no payments are made and no further borrowing occurs between them for 13 years, then how much money will Emma' s friend owe her? $1,061.36 $1,754.00 $2,081.20 $158.00 Now, assume that Emma's friend volunteers to pay compound interest instead of simple interest for her loan. If interest is accrued at 5.8% compounded annually, all other things being equal, how much money will Emma's friend owe her in 13 years? $2,081.20 $1,058.00 $120.71 $ 1,754.00 Emma has another investment option in the market that pays 5.8% nominal interest, but it's compounded quarterly. Keeping everything else constant, how much money will Emma have in 13 years if she invests $1,000 in this fund? $158.00 $129.72 $2,114.01 $1,059.27
Sonia buys a house for $250,000. she makes a down payment of 15% of the purchase price and takes a 30-year mortgage for the balance. a) what is your down payment b) what is your mortgage amount c0 what is the total interest charged over the life loan if your monthly payment is 1,200 dollars
Your sister bought a condominium unit for P9 300 000 through a condominium loan which she availed of from a universal bank at a fixed annual rate of 8% for 10 years.A. What amount is financed by the bank if she is required to pay an equity of 30% of the total price of the condominium?B. How much would be your sister’s monthly amortization if she is required to pay an equity of 30% of the total price of the condominium?
Susanna wants to purchase a house costing $212,286. She plans to put $51,874 toward a down payment and finance the rest at 2.9% payable monthly for 30 years. If she stays with this payment schedule for the entire 30 years, how much will she actually pay for the house including down payment and interest?
Anthony planned to buy a house but could afford to pay only $9,000 at the end of every 6 months for a mortgage with an interest rate of 5.70% compounded semi-annually for 25 years. She paid $30,000 as a down payment. a. What was the maximum amount she could afford to pay for a house? b. What was her total amount spent for the house through the mortgage period including the down payment (not taking the time-value of money into account)? c. What was the total amount of interest paid through the mortgage period?
Annette wants a home improvement loan to renovate her kitchen. Her bank will charge her 3.6%, compounded quarterly. She already has a 10-year GIC that will mature in 5 years. When her GlC reaches maturity, Annette wants to use the money to repay the home improvement loan with one payment. She wants the amount of the payment to be no more than $20 000. a) How much can she borrow? b) How much interest does she pay?
Donna wants to buy a house for $900,000.00. She makes a 15% down payment and borrows the rest by getting a 30-year mortgage. Her monthly mortgage payment is $3,803.75. What is the principal of her mortgage? What is the total she will pay on the loan?
Thabo borrows R850 000 from a bank to buy a house. He has to pay the bank back R7 647,67 per month for 20 year Calculate the number of payments he has to make.
Sarah secured a bank loan of $190,000 for the purchase of a house. Themortage is the amortized through mothly paymetns for a term of 15 years, with an interst rate of 3%/year compunded monthly on the unpaid balance. She plans to sell her house in 10 years. How much will SArah still owe on her house at that time? (round your answer to the nearest cent)
Margaret has $650 000 in her RRSP and wishes to retire.She is thinking of using the funds to purchase an annuity that earn 5% compounded annually and pays her $3 700 at the end of each month.If she buys the annuity for how long in years and months will she receive the payments?
Mambo is 25 years old and currently earns R5595 per month. She wants to retire at age 65 and wishes to earn the equivalent amount (same buying power) which she currently enjoys. Inflation is expected to remain at 6% pa until retirement. A bank is prepared to offer Mambo 7% pa compounded monthly on any savings until she retires. Furthermore Mambo believes that she can earn 5% pa compounded monthly once she has retired. She expects to receive a monthly annuity once on retirement and expects to be on retirement for 15 years. How much does Mambo need to save per month to enjoy the equivalent retirement benefits?
Rula has purchased a new car for $20,000. She paid $3,000 as a down payment, and she paid the remaining balance by a loan from her hometown bank. Rula will pay off the loan by equal annual installments of $10058. How many years will it take Rula to pay off the loan, given an opportunity cost of 12%? Answer: