Alhambra Corporation borrowed $1 million from Anaheim Bank with the understanding that Alhambra will pay the loan back in 6 monthly installments of $175,000 each. Find the annual rate of interest charged by the bank.
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Alhambra Corporation borrowed $1 million from Anaheim Bank with the understanding that Alhambra will pay the loan back in 6 monthly installments of $175,000 each. Find the annual rate of interest charged by the bank.
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- Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $8,264.70 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.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?Ames Corporation has borrowed $5 million from a bank with the understanding that it will pay the loan in monthly installments of $100,000 each. The bank charges interest at the rate of 0.8% per month. Find the time required to pay the loan.
- SureWin Company owes an amount of debt to a bank and the bank proposed the following annual payments to pay off the debt. Year 0 (Today): 20,000 Year 1: 24,000; Year 2: 30,000; Year 3: 30,000; Year 4: 35,000; (1) If the appropriate interest rate that bank is charging is APR 6% annual compounding, what would be the amount to debt owed today? (2) If SureWin can negotiate with the bank to pay yearly equal instalments over 4 years starting from the end of year 1 with the same 6% annual interest rate, what would be the amount of yearly payment? (3) If the bank accepts SureWin proposal in (2), what would be the interest amount paid to the bank in the first year?2.49. Akron Corporation has borrowed $1 million from Canton Bank with the understanding that Akron will pay the loan back in 12 monthly installments of $90,000 each. Find the annual rate of interest charged by the bank.Bennington Company has borrowed a certain amount from the bank that it will repay in 24 monthly installments. The bank charges 6% interest annually on this loan and the monthly payment is $6000. Find the amount of loan.
- A business wants to borrow $300,000 from a bank for a future investment. The bank offers a 5 year loan, compounded quarterly, at 5% interest on the debt. During the period of the bank loan, the company establishes a sinking fund to help discharge the bank loan, at 4%, compounded quarterly, using the future lump sum debt as the lump sum payment in the sinking fund. FIND: the quarterly deposits that the company must deposit into the sinking fund to pay off its bank debt in one lump sum.Boyd Company has a line of credit with State Bank. Boyd can borrow up to $500,000 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during Year 1. Boyd agreed to pay interest at an annual rate equal to 1 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month, Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Boyd pays 6 percent (5 percent +1 percent) annual interest on $70,000 for the month of January. Amount Borrowed or (Repaid) $ 70,000 50,000 (42,000) No change (30,000) (20,000) Boyd earned $35,000 of cash revenue during Year 1. Month January February March April through October November December Income Statement Required Prepare an income statement, balance sheet, and statement of cash flows for Year 1. Service revenue Expenses…A bank is offering a loan of $20,000 with an interest rate of 9%, payable with monthly payments over a 4-year period. a. Calculate the monthly payment required to repay the loan. b. This bank also charges a loan fee of 4% of the amount of the loan, payable at the time of the closing of the loan (that is, at the time the borrower receives the money). What effective interest rate is the bank charging?
- Boyd Company has a line of credit with State Bank. Boyd can borrow up to $520,000 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during Year 1. Boyd agreed to pay interest at an annual rate equal to 1 percent above the bank’s prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Boyd pays 6 percent (5 percent + 1 percent) annual interest on $72,000 for the month of January. Month Amount Borrowed or (Repaid) Prime Rate for the Month January $ 72,000 5% February 52,000 5 March (46,000) 6 April through October No change No change November (36,000) 6 December (22,000) 5 Boyd earned $37,000 of cash revenue during Year 1.Required Prepare an income statement, balance sheetand statement of cash…Bridgeport Company has a line of credit with National Bank. Bridgeport can borrow up to $1,040,000 at any time over the course of the Year 1 calendar year. The following table shows the prime rate expressed as an annual percentage, along with the amounts borrowed and repaid during the first two months of Year 1. Bridgeport agreed to pay interest at an annual rate equal to 1 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Bridgeport pays 4 percent (3 percent + 1 percent) annual interest on $154,800 for the month of January. Month January February Month Amount borrowed or (repaid) January February $154,800 (31,600) Required: Compute the amount of (a) interest paid and (b) Bridgeport's liability balance at the end of each of the first two months. Prime rate for the (a) Interest Paid month 3% 3.5% (b)…You borrowed $200,000 from the Bank of Nova Scotia. The loan is to be repaid at the end of five (5) years. The bank is to receive 8% interest on the loan balance that is outstanding. i. Calculate the yearly payment on a $200 000 loan. ii. Prepare an amortization schedule for this loan. iii. What is the loan balance just after the end of year two (2)? iv. What is the total interest paid over the life of the loan? v. What is the effective rate of interest on the loan if interest is compounded quarterly?
