Supper Accountants Inc plans to sell a bond to finance its plant. The face value of the bond is $100,000 and it will be due in 5 years. The bo is offered at 6% annual interest rate, although the market rate is 7%. Supper Accountants is expected to receive $95,900 in cash when the sales is completed. How much interest expense should Supper Accountants record for the first year? 6,000 5,754 7,000 6.173
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- XYZ funds purchased a bank bill (face value=1 million) on 10th June 2020. The bill will mature in 60 days and the yield is 6.95%. After holding the bill for 40 days, the funds sold the bill at a yield of 6.5%. a) Calculate the profit through buy and sell of this bank bill. b) Work out the simple annual interest rate and effective annual interest rate earned by XYZ.18. An engineer has a current balance of P110 000.00 in his savings account. The bank will be giving 6% interest compounded semi-annually for the next two years and 8% interest compounded semi-annually thereafter. A large corporation is offering P10 000.00, 8% bonds that pay interest every six months for P11 000.00. If the maturity is five years, and bond earnings are deposited in the bank, should he withdraw and purchase the bonds, or should he leave his savings in the bank? Use future worth analysis. (Ans. Money should be left in the bank; P156 654.05; P147 706.39)Van Buren Resources Inc. is considering borrowing $120,000 for 168 days from its bank. Van Buren will pay $7,000 of interest at maturity, and it will repay the $120,000 of principal at maturity. Assume that there are 365 days per year. Calculate the loan’s annual financing cost. Round your answer to two decimal places. % Calculate the loan’s annual percentage rate. Round your answer to two decimal places. %
- The Happy Hang Glide Company is purchasing a building and has obtained a $150,000 mortgage loan for 20 years. The loan bears a compound interest rate of 16% p.a. and calls for equal annual installment payments at the end of each of 20 years. What is the amount of annual payment? $15541.36 $26350.35 $22084.15 $25300.05 (LOA Bank Limited quotes a 9 percent interest rate on loans for 1 year. You are seeking a loan of $50,000 and as such you are expected to pay $4,500 in interest for the year. The terms of the loan require you to repay the principal and interest at the end of year one = $54,500. LOA Bank Limited thus requires you to pay $54,500 over a 12 month period, or $4,541.67, per month over the next 12 months.What rate should be legally quoted?Kindly show all workings in detailsBirchcreek Construction has three payments left on a debt obligation in the amounts of $5,500, $10,250, and $8,000 due 1.5 years, 2 years, and 3.5 years from today. Prevailing interest rates are projected to be 8% compounded quarterly in the first year and 8.25% compounded semi-annually thereafter. If Birchcreek wants to settle the debt today, what amount should the creditor be willing to accept?
- LOA Bank Limited quotes a 9 percent interest rate on loans for 1 year. You are seeking a loan of $50,000 and as such you are expected to pay $4,500 in interest for the year. The terms of the loan require you to repay the principal and interest at the end of year one = $54,500. LOA Bank Limited thus requires you to pay $54,500 over a 12 month period, or $4,541.67, per month over the next 12 months.Is this a 9 percent loan? What rate should be legally quoted? What is the effective annual rate?Kindly show all workings in detail.Lugia Bank granted a P4,000,000 loan to Ho-oh Company on January 1, 2020. The annual interest of the loan is 12% payable semi-annually. The loan matures in two years. The effective interest rate on the loan is 16%. (Round off present value factors up to four decimal point; only round off up to two decimals the final value) Questions: 1. What is the initial carrying amount of the loan? 2. How much is the interest income for the year 2020? 3, What is the balance of the discount on the loan as of December 31, 2020?A 3,300,000 loan was granted to a borrower by Norayma Bank with a nominal interest rate of 12% which is paid every year end. The loan matures in 4 years on December 31, 2023. After considering the direct origination cost and origination fees, the market rate on the loan is 8%. 1,124,000 was earned as interest income for the whole term of the loan. If the origination fee was 100,000, determine the initial carrying cost of the loan.
- Van Buren Resources Inc. is considering borrowing $100,000 for 202 days from its bank. Van Buren will pay $3,000 of interest at maturity, and it will repay the $100,000 of principal at maturity. Assume that there are 365 days per year. Calculate the loan’s annual percentage rate. Round your answer to two decimal places. %A 3,300,000 loan was granted to a borrower by Norayma Bank with a nominal interest rate of 12% which is paid every year end. The loan matures in 4 years on December 31, 2023. After considering the direct origination cost and origination fees, the market rate on the loan is 8%. 1,124,000 was earned as interest income for the whole term of the loan. If the origination fee was 100,000, determine the initial carrying cost of the loan. The answer is: 3,760,000 but I need the solution. ThanksBlue Skies Bank of Florida issues a three-month (90-day) negotiable CD in the amount of $20 million to ABC Insurance Company at a negotiated annual interest rate of 2.75 percent (360 day basis). Calculate the value of this CD account on the day it matures and the amount of interest income ABC will earn. What interest return will ABC Insurance earn in a 365 day year? write the laws pleas