Falco Inc. financed the purchase of a machine with a loan at 2.82% compounded quarterly. This loan will be settled by making payments of $8,000 at the end of every quarter for 5 years. a. What was the principal balance of the loan? Round to the nearest cent b. What was the total amount of interest charged?
Falco Inc. financed the purchase of a machine with a loan at 2.82% compounded quarterly. This loan will be settled by making payments of $8,000 at the end of every quarter for 5 years. a. What was the principal balance of the loan? Round to the nearest cent b. What was the total amount of interest charged?
Chapter19: Lease And Intermediate-term Financing
Section: Chapter Questions
Problem 17P
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Falco Inc. financed the purchase of a machine with a loan at 2.82% compounded quarterly. This loan will be settled by making payments of $8,000 at the end of every quarter for 5 years.
a. What was the principal balance of the loan?
Round to the nearest cent
b. What was the total amount of interest charged?
Laura invested $650 at the end of every month in an investment fund that was earning interest at a rate of 4.44% compounded monthly. She stopped making regular deposits at the end of 5 years when the interest rate changed to 6.66% compounded quarterly. However, she let the money grow in this investment fund for the next 2 years.
a. Calculate the accumulated balance in her investment fund at the end of 5 years.
Round to the nearest cent
b. Calculate the accumulated balance in her investment fund at the end of 7 years.
Round to the nearest cent
c. Calculate the total interest earned over the 7-year period.
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