you borrow $20,000 from a bank to be repaid in three equal annual instalment at 9% interest compounded annually. What is the portion of interest payment for the 2nd annual payment? Select one: A 510 B. 1089 C. 549 D. 1251 E. 1800

you borrow $20,000 from a bank to be repaid in three equal annual instalment at 9% interest compounded annually. What is the portion of interest payment for the 2nd annual payment? Select one: A 510 B. 1089 C. 549 D. 1251 E. 1800

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 22PROB

See similar textbooks

Related questions

Q: 7 is invested at the end of each 6 months for 6 equal payments at 0.27 compounded semi - annually.…

A: Given information : Periodic investment $ 1,287.00 Interest rate 27% Total installments 6…

Q: A company borrows $100,000 by signing a $100,000, 5% note that requires four equal payments of…

A: Note payable $100,000 Interest rate 5% Present value annuity of 4 payments at 5% is 3.5460.

Q: Anna borrows 131000 from a bank for a term of 18 years. The loan is to be repaid by level annual…

A: Loan Amount = 131,000 Interest Rate = 4% Time Period = 18 Years

Q: A limited company borrows form commercial bank 1,000,000 at 12% interest to be paid in equal annual…

A: Installments are the scheduled payments as per the agreed terms and conditions and the loan amount…

Q: Forty eight monthly deposits are made into an account paying 6% nominal interest per year compounded…

A: Amount of each deposit = M Number of deposits (n) = 48 r = 6% per annum = 0.5% per month Accumulated…

Q: Your bank pays 8% interest, compounded semiannually. Use Table 12-1 to find the future value (in $)…

A: Annual interest rate = 8% Semi annual interest rate (r) = 8%/2 = 4% Semi annual deposit (P) = $ 900…

Q: Starting three years from today, you make equal annual deposits of $5,000 into an account which…

A: Effective annual rate is calculated using the formula: EAR=1+rmm-1=1+12%22-1=1.062-1=12.36%

Q: A businessman bought a delivery van costing P 35,000 payable in ten semiannual payments, each…

A: Van cost (PV) = P35,000 Interest rate = 26% Semi annual interest rate (r) = 26%/2 = 13% Number of…

Q: Your bank pays 4% interest, compounded semiannually. Use Table 12-1 to find the future value (in $)…

A: Compounding interest semiannually indicates that the principle of a loan or investment includes the…

Q: A bank pays 6% interest, compounded semiannually. Use the appropriate formula to find how much…

A: Present Value of Annuity Due refers to a concept which dictates the discounted value of cash flows…

Q: P45,000 is deposited in a savings account that pays 5%interest compounded semi-annually. Equal…

A: Perpetuity is the stream of cash flows or payments that are made at equal intervals that do not have…

Q: b) A man borrowed GH¢164,000 from a bank to help finance the purchase of a store. The bank charges…

A: Interest is the cost of borrowing money. It can be simple or compounded.

Q: You borrowed $25,000 from a bank at an interest rate of 12%, compoundedmonthly. This loan will be…

A: Single payment of the loan amount after certain payments of installment is the present worth of the…

Q: 10) $350 is deposited at the end of each month for 4 months at 8% per year compounded monthly. What…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: An individual borrows ₱150,000 from a bank at 10% annually compounded interest to be repaid in 6…

A: Loan can be amortized by repaying it in equal instalments. Each payment comprises of both interest…

Q: CNB, Inc. will deposit $25,000 into a money market account at the end of each year for the next…

A: The present value method is used to evaluate the different levels of investment projects. With the…

Q: If for the next 30 years you place OMR 3,610 in equal annual year-end-deposits into an account…

A: Future value of annual year end deposits is calculated by future value of ordinary annuity formula.…

Q: How much is P 100,000.00 worth in three years if deposited in a continuously compounded account with…

A: Investment 100,000 Period in years 3 Interest rate 3%…

Q: Sharapova Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the…

A: The amortization table and the journal entry for the first year payment of Sharapova Inc are as…

Q: A man takes on a loan of $135,000. The loan is being repaid annually by a 10-year increasing…

A: As given in question, Loan amount = $135000 Tenure = 10 yrs Initial payment = $10000 Subsequent…

Q: Ms X borrows 5000 at 5% annual effective interest, with payments at end of each year. The lender…

A: The loan instalment includes both principal repayment and interest amount.

Q: A loan of P 58,000 with interest at 20% compounded quarterly, will be paid by equal periodic…

A: Quarterly Compounding: It is interest amount that is earned quarterly on an account. It mean…

Q: If, starting one year from today, 12 equal annual deposits of $2,500 are made into an account…

A: Annual deposit (P) = $ 2500 Annual interest rate (R) = 0% Number of annual deposit (N) = 12

Q: An amount of $6,880 is deposited into an account earning 3% interest compounded quarterly. How much…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: You wish to make 4 equal annual deposits into a savings account such that at the time of your last…

Q: Prepare anamortization schedule for a $50,000 loan that pays10% interest annually for five…

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

Q: SureWin Company owes an amount of debt to a bank and the bank proposed the following annual payments…

A: The Present Value of a cash flow series: The present value of a cash flow series is calculated as…

Q: (a) A sum of $2000 is deposited in a time-deposit account that pays interest at a rate of 3% per…

A: Here we will use the concept of time value of money. As per the concept of time value of money the…

Q: A man bought an equipment costing P60,000 payable in 12 quarter payments, each installment payable…

A: Cost (PV) = P60,000 Number of payments (n) = 12 Interest rate = 24% Quarterly interest rate (r) =…

Q: Your grandfather deposits $50,000 into your savings account that pays 6% interest compounded…

A: To solve the question, we first need to determine the effective annual rate of interest. This is…

Q: Your bank pays 8% interest, compounded semiannually. Use Table 12-1 to find the future value (in $)…

A: Future Value of Annuity Due refers to the concept which dictates the compounded value of a sum of…

Q: Mr. Lamb borrowed $6775 at 8.75 % compounded monthly. He agreed to repay the loan in equal monthly…

A: Here, Loan Amount = $6775 Interest rate = 8.75% Term of loan = 5 years No. of compounding periods =…

Q: A loan of £ 2,120,000 is repayable by equal quarterly payments for 15 years. The effective rate of…

A: i) The quarterly payment can be computed as follows:

Q: You borrowed $25,000 from a bank at an interest rate of 12%, compoundedmonthly. This loan will be…

A: Loan amortization is a type of loan where the borrower is required to pay periodical or scheduled…

Q: A $10,000 certificate of deposit earns interest of 8 percent per year, compounded Semiannually. Find…

A: Time value tells that money received today has more value than that of receiving the exact amount…

Q: Assume that you borrow 50,000 JPY under the system of 5% yearly compound interest. (1) If you repay…

A: Equal Loan installment is that under which we will pay the equal installment every year which…

Q: A deposit of $3,000 is made in a savings account that pays 7.5% interest compounded annually. How…

A: Compound Interest is calculated by multiplying the initial principal amount by one plus the annual…

Q: An amount of 100,000 was borrowed and was to be repaid in 10 instalments at the end of every quarter…

A: Given: P= $100,000 r= 12% compounded semi annually = 12%/2 = 6% = 0.06 Number of years= 2.5 years…

Q: A deposit of $50,000 is made into an account that pays 10% compounded semiannually. How much would…

A: Introduction: Amount which is deposited into an account now is referred to as present value. The…

Q: Calculate the future worth of 20 annual $4,000 deposits in a savings accountthat earns 8% compounded…

A: The future value of periodic investment consist of principal payments and interest accumulated on…

Q: You borrowed $120,000, agreeing to pay the balance in 12 equal annual installments at 9% annual…

A: Loan is the sum of money which is borrowed by the borrower from the lender and the amount is paid…

Q: 1. If P5,000 is invested in a time-deposit for 2 years in a bank that offers 4% annual interest…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: 1. At the beginning of each quarter, P36,000 is deposited into savings account that pays 6%…

A: Honor code: Since you have asked multiple questions, we will solve the one question for you. If you…

Q: 3) You are loaned 810,000 at an effective annual interest rate of i = 7% and agree to pay this back…

A: The loan refers to the amount that a borrower takes from the lender at a fixed rate of interest for…

Q: A $120,000 loan at 8% compounded semiannually wil be repaid by monthly payments over a 25-year…

A: The loan amount (PV) is $120,000. The maturity period is 25 years and the total number of payment…

Q: Assume Sheffield Corp. deposits $81000 with First National Bank in an account earning interest at 4%…

A: Option A is correct.

Q: A fully secured loan of P30,000 was to be amortized by 10 equal semi-annual payments, the first…

A: Loan amount (L) = P 30000 Total payments (n) = 10 r = 12% per annum = 6% semiannually Let semiannual…

Q: A bank pays 6% interest, compounded semiannually. Use the appropriate formula to find how much…

A: Annual interest rate = 6% Semi annual interest rate (i) = 6%/2 = 3% Period = 12 Years Number of semi…

Q: An engineer deposits $830 per month into a savings account that pays interest at a rate of 10% per…

A: Future value of annuity is the value of recurring regular interval cashflow compounded at the…

Question

you borrow $20,000 from a bank to be repaid in three equal annual
instalment at 9% interest compounded annually. What is the portion of
interest payment for the 2nd annual payment?
Select one:
A 510
B. 1089
C. 549
D. 1251
E. 1800

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Trending now

This is a popular solution!

Step by step

Solved in 6 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
Next Level Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit 2 withdrawals: 40,000 at the end of 4 years and 50,000 at the end of 10 years. Analyze the problem to determine the required deposit, stating the procedure to follow and the tables to use in developing the solution.
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
A bank customer borrows X at an annual effective rate of 12.5% and makes level payments at the end of each year for n years. (i) The interest portion of the final payment is 153.86. (ii) The total principal repaid as of time (n − 1) is 6009.12. (iii) The principal repaid in the first payment is Y. Calculate Y. OA. 500 OB. 470 O C. 480 O D. 490 OE. 510
If you borrow $7,300 at $800 interest for one year, what is your effective interest rate for the following payment plans? Note: Input your answers as a percent rounded to 2 decimal places. a. Annual payment b. Semiannual payments c. Quarterly payments d. Monthly payments Effective Rate of Interest % % % %
An individual borrows $4,500 from the bank to be repaid in three equal annual installments, with the first installment to be paid one year after the loan amount is received. If interest on the loan is charged at a rate of 9 per cent per annum compounded annually, to the nearest dollar the annual installment is a. $1,259 b. $1,373 c. $1,778 d. $1,631
What is the quarterly payment on a loan of $22,000 for 5 years at i= 8% per year, compounded semi-annually? Assume that interperiod cash flows earn compound interest (ABET, SO1) Select one: O a. 1220 O b. 1342 O c. 1281 O d. 1403 O e. 1464
suppose that $2700 is set aside each year and invested in a savings account that pays 8% interest per year, componded continously, part a: determined the accumuluated savings in this account at teh end of 25 yrs. part b: in part a,suppose that an annuity will be withdrawn from savings that have been accumulated at the EOY 25. The annuity will extend from teh EOY 26 to EOY 33, what is the value of this annuity if teh interest rate and componding frquency in part a do not change
a. Set up an amortization schedule for a $19,000 loan to be repaid in equal installments atthe end of each of the next 3 years. The interest rate is 8% compounded annually.b. What percentage of the payment represents interest and what percentage representsprincipal for each of the 3 years? Why do these percentages change over time?
How much is accumulated for a savings plan with a deposit P1, 900 today at 13% compounded quarterly over two years? a) P2159.30 b) P1075.35 c) P2454.00 d) P1062.00
For each of the following ordinary annuities, calculate the interest and principal portion of the payment indicated. Principal Interest Payment Frequency Loan Term Payment Number to Find 1 $5,000.00 8% compounded quarterly monthly 3 years 16 2 $45,000.00 7.65% compounded monthly monthly 5 years 23