Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Using the PVIFA table determine the annual payment on a $600,000, 10 percent, business loan from a commercial bank that is to be amortized over a five-year period
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- A businessman wishes to borrow an amount of K4 million for a term of 3 years.The agreed rate of interest is 10% per annum effective for the first 2 years, and 6%per annum effective for the final year.Repayments on the loan are made annually in arrears.The amount of the level annual repayment is K1,590,328.58.(i) Draw up the loan schedule for the full three-year period.(ii) Calculate what percentage of the loan has been repaid by the end of year 2.(iii) Explain how this percentage figure would alter if the rate of interest had insteadbeen 6% for the first two years and 10% for the final year.arrow_forwardCompute the size of the final payment for the following loan. Perlodic Principal S Payment $ 9900 Payment Period 6 months Payment Interest Rate Compounding Made at: beginning Period semi-annually 520 The size of the final payment is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to sox decimal places as needed.)arrow_forwardAn $80,000 loan is amortized by payments of $1950 at the end of every quarter at a rate of 9% compounded quarterly. 1. Construct a partial amortization schedule showing the last 2 payments. 2. Determine the total amount paid to settle the loan. 3. Determine the total principal repaid. 4. Determine the total amount of interest paid.arrow_forward
- Prepare anamortization schedule for a $50,000 loan that pays10% interest annually for five yearsassuming the bank requires $13,189.87yearly payment.arrow_forwardThe finance department of your company needs to separate the interest and principal of the final payment of a loan. The company borrowed 20,000 at 8% compounded quarterly with month end payments for two years. 1. What are the correct portions assigned to principal interest of the final payment?arrow_forwardAn amortized loan: repays both the principal and the interest in one lump sum at the end of the loan term. requires the principal amount to be repaid in even increments over the life of the loan. requires that all payments be equal in amount and include both principal and interest. requires that all interest be repaid on a monthly basis while the principal is repaid at the end of the loan term. may have equal or increasing amounts applied to the principal from each loan payment.arrow_forward
- Loan payment Determine the equal, annual, end-of-year payment required each year over the life of the loan shown in the following table to repay it fully during the stated term of the loan. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Principal $7,000 Interest rate 13% ... The amount of the equal, annual, end-of-year payment, CF, is $ Term of loan (years) 29 (Round to the nearest cent.)arrow_forwardWrite out a complete schedule for the amortization of a $50,000 loan with payments every 6 months at 14% interest compounded semiannually for 1 year. Complete the schedule below. Payment number Amount Interest 1 $ $ 2 S $ (Round to the nearest cent as needed.) Applied to principal $ $ Unpaid Balance $ $arrow_forwardonsider the following loan. Complete parts (a)-(c) below. n individual borrowed $65,000 at an APR of 5%, which will be paid off with monthly payments of $442 for 19 years. ... a. Identify the amount borrowed, the annual interest rate, the number of payments per year, the loan term, and the payment amount. The amount borrowed is $ 65000, the annual interest rate is 5%, the number of payments per year is 12, the loan term is 19 years, and the payment amount is $ 442. b. How many total payments does the loan require? What is the total amount paid over the full term of the loan? There are 228 payments toward the loan and the total amount paid is $ 100776 c. Of the total amount paid, what percentage is paid toward the principal and what percentage is paid for interest? The percentage paid toward the principal is% and the percentage paid for interest is%. (Round to the nearest tenth as needed.)arrow_forward
- The following loan is fully amortizing. The loan is for $12,000 at 5% interest to be repaid over three (3) years. Amortize this loan on a monthly basis. Calculate the interest portion of the fourth (4th) payment considering that an additional payment of $2,000 was made with the second payment.arrow_forwardFind the payment necessary to amortize the loan.$2500; 6% compounded annually; 7 annual paymentsarrow_forwardA student loan is offered under the following conditions: credit of 30, 000 euros at 3% over a period of 6 years contracted on June 1, 2020; no repayment or interest payments for 2 years; The re-payment is provided in 4 constant annual instalments paid on June 1st for the following 4 years. a) Calculate the constant annuities of this credit. b) Draw the amortization table Years (payment in June) Principal repaid Interest paid Annual payments outstanding capitalarrow_forward
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