A contractor bought a concrete mixer at P150,000 if paid in cash. The mixer may also be purchased by installment to be paid within 7 years. If money worth 9%. The amount of each annual payment(P), if all payments made at the beginning of each year, is?
Q: Welmer bought an equipment costing P125,000 payable in 12 quarterly payments. Each installment is…
A: Cost of Equipment P1,25,000 Rate of Interest (14% / 4) 3.50% Period 12
Q: Lukas Center acquired a new Laser Machine worth ₱580,000.00. The center plans to pay 35% advance…
A: Given Loan Amount = 580,000 The required solutions for the question above are highlighted in the…
Q: The buyer of a lot paid P110,000 down payment and agreed to pay P35 000 at the end of each six…
A: The cash price can be found by adding up the downpayment and present value of the annuity. The…
Q: If money is worth 8% annually, what annual payment is required to raise ₱ 18,811 after 2 years if…
A: Future Value of Annuity Due = (1 + r) x P x [{(1 + r)^n} - 1] / r
Q: A car was bought on an installment basis with a monthly installment of P30,000 for 60 months. If the…
A: The present value is the value of the sum received at time 0 or the current period. It is the value…
Q: A house costs P2,900,000 cash. The seller and the buyer had agreed to have a series of annual…
A: House cost (C) = P 2900000 Total payments (n) = 10 r = 8% Let the annual payment = A
Q: The company purchased equipment and agreed to make payments of $5,400 at the end of each year for…
A: Present value is the current amount which is expected to be received or incurred by investors over…
Q: A condominium unit is being amortized with a quarterly payment of P56,000 for 5 years at 3%…
A: Loan means a value which is borrowed from the external sources for a certain period. This loan is…
Q: what is the equivalent annual cost of the maintenance?
A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…
Q: For equipment upgrades, a business borrowed $400,000 at 8% compounded semiannually for 7 years. What…
A: Loan payments are given by, L = E(1-(1+r)n)/r Where L = loan taken = $400000 r…
Q: A firm wishes to set aside equal amounta at the end of each of 10 years beginning at the end of the…
A: Calculation of Present value of maintenance funds Pvf @ 6% = 1 / (1+rate)^period Present value =…
Q: A condominium unit can be bought at a down payment of P150,000 and a monthly payment of P 23,347 for…
A: The present value of the annuity is the current worth of a cash flow series at a certain rate of…
Q: MMS Corp borrows $1,650,000 today for a new building. The loan is an equal principal payment loan…
A: Computation of payment due amount:Hence, the due amount is $20,219.95 or $20,220.
Q: A car was bought on an installment basis with a monthly installment of 30,000 for 60 months. If the…
A: Monthly payment (P) = $ 30,000 Number of monthly payments (N) = 60 Annual interest rate = 12%…
Q: Today, Cari purchased a car worth P1.5 million. A down payment of P150,000.00 has been made, and the…
A: Amortization of Loan Calculation of Equalized Payment ( instalment )
Q: Every end of three months, payment of Php 1,300 is made for 5 years, which is deferred for 2 years.…
A:
Q: A gasoline engine is available on instalment basis with a down payment of P 10,682 and P 5,479 at…
A: Present Value of Annuity Due refers to a concept which determines the value of cash flows at present…
Q: A gasoline engine is available on instalment basis with a down payment of P 12,423 and P 5,532 at…
A: The cash price can be computed as the sum of down payment and present value of the loan.
Q: The maintenance on a machine is expected to be ₱8984 for the second year and an additional ₱1,750…
A: Annual cost for 6 years = 1,750 Total Cost for the second year = 10,734 (8,984 + 1,750) Interest…
Q: Lukas Center acquired a new Laser Machine worth ₱580,000.00. The center plans to pay 35% advance…
A: In order to find the loan amount or the balance one has to deduct the advance payment from the…
Q: The total maintenance expense of a certain machine is 15,845 and can be disbursed by paying 3,458 at…
A: Annual equivalent cost is that is equivalent to the cost today considering the interest rate and…
Q: A ten-bagger concrete mixer can be purchased with a down payment of P18,000 and equal installments…
A: The equivalent cash price of mixer is the sum of down payment and present value of annuity.
Q: In buying a farm worth P 300,000, the purchaser agrees to pay a down payment of P 80,000 and a…
A: Data given: Cost= P 300,000 Down payment= P 80,000 Second payment at the end of 2 years= P 60,000…
Q: A contractor bought a concrete mixer at P 150,000 if paid in cash. The mixer may also be purchased…
A: Cost of mixer (PV) = P 150,000 Interest rate (r) = 8% Period (n) = 5 Years Annual payment = P
Q: A house and lot is for sale at a monthly payment of P30,000 for 25 years at an interest rate of 3%…
A: Monthly payment (A) = P 30000 Duration (n) = 25 years = 300 months Interest rate (r) = 3% per annum…
Q: A house that sells for P900,000 can be purchased under terms requiring 100 monthly payments. Assume…
A: Given that;Present value is P900,000Number of periods is 100
Q: A building is to be paid indefinitely at the rate of 6 %. The building's price is P1M if paid in…
A: Compounding is done by the lenders when they provide interest on amount which includes principal as…
Q: The maintenance for a piece of equipment costs P16,875 at the end of year one and increases by…
A: The equivalent annual cost of the maintenance is the cost over the entire period of maintenance…
Q: 1. A man bought a lot worth P1,000,000 if paid in cash. On the installment basis, he paid a…
A: Lot Worth (P0) = P1,000,000 Down payment (Cf0) = P200,000 Payment at year 1 (Cf1) = P300,000 Payment…
Q: 4. The sale of a property provides for payments of $6,000 due at the beginning of every three months…
A: Quarterly Payment = 6000 Beginning of period payments N = 5 years i.e. 20 quarters Payments start…
Q: A farmer bought an equipment costing P12, 000. The equipment may be purchased by installment for 5…
A: Cost of equipment (PV) = P 12,000 Interest rate (r) = 8% Number of annual payment (n) = 5 Years…
Q: Lukas Center acquired a new Laser Machine worth ₱580,000.00. The center plans to pay 35% advance…
A: Amortization is the action or process of gradually writing off the initial cost of an asset.
Q: a piece of machinery can be bought for Php 10,000 cash or for Php 2,000 down and 20,000 at the end…
A: Present cost = Php 10,000 Down payment = Php 2000 Repayment after 15 years = Php. 20000
Q: How much interest was earned by an investment that earns at a rate of 9% compounded semiannually for…
A: The present value is that amount without which we cannot obtain the future value. The future value,…
Q: CTL (Concrete Testing Lab) borrowed $40,000 for new equipment at 12% per year, compounded quarterly.…
A: Given Information: Amount borrowed is $40,000 Interest rate is 12% compounded quarterly Number of…
Q: Determine the amount of the periodic payments needed To pay off the following purchases. Payments…
A: Given information : Particulars Option 1 Option 2 Option 3 Purchase price 1205 26565 65500…
Q: A contractor’s price for a new building was $96,000. You decide to buy the building, making a…
A: Payments to the loans are made by equal instalments which carry both interest and payment of…
Q: Determine the amount of the periodic payments needed To pay off the following purchases. Payments…
A: Periodic payment can be calculated using the formula of the present value of annuity.
Q: If money is worth 8% annually, what annual payment is required to raise P 17,059 after 1 years if…
A: The question is based on calculation of present value of future expected cash flow . The calculation…
Q: A pair of earrings is priced at P30,000. A client made a down payment of P5,000 and promised to pay…
A: Price = P30,000 Down payment = P5,000 Balance (PV) = 30,000-5,000 = P25,000 Interest rate = 3%…
Q: Lukas Center acquired a new Laser Machine worth ₱580,000.00. The center plans to pay 35% advance…
A: Price of the Laser Machine= ₱580,000.00 35% is advance payment Duration of the loan= 7 years…
Q: A contractor is planning to purchase a machine one year from now at a cost of Php1 Million. The…
A: Machine cost (C) = Php 1 million r = 1.5% per month n = 1 year = 12 months
Q: A company rent a building for P50,000 per month for a period of 10 years. Find the accumulative…
A: FV of Ordinary Annuity=C×[(1+i)n−1/i] where: C=cash flow per period i=interest rate n=number of…
Q: An architect deposit 30,000 pesos every year end, at what nominal annual rate compounded…
A: Given: Annuity amount “PMT” = 30000 Future Value “FV” = 432500 Number of years “n” = 13
Q: The Atlas Machinery Corporation sells its equipment to contractors on either of the following…
A: The concept is of present value of money. We will calculate present value of outflow in both the…
Q: An entrepreneur bought a used heavy equipment for Rp. 96,000,000 on January 1, 2003. The…
A: Loan payment is calculated using Present value of annuity formula which is given as follows PV =…
Q: Lukas Center acquired a new Laser Machine worth ₱580,000.00. The center plans to pay 35% advance…
A: Quarterly payment will be computed using : = Total amount to be paid / Present Value of Annuity (n%,…
Step by step
Solved in 3 steps
- Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of 5,000 at the end of each of the next 5 years. Assume a prevailing interest rate of 15%. The present value of an ordinary annuity of 1 at 15% for 5 periods is 3.35. The future amount of an ordinary annuity of 1 at 15% for 5 periods is 6.74. The present value of 1 at 15% for 5 periods is 0.5. How much should Electro record as the cost of the machine? a. 12,500 b. 16,750 c. 25,000 d. 33,700Grummet Company is acquiring a new wood lathe with a cash purchase price of $80,000. The Wood Master Industries (the manufacturer) has agreed to accept $23,500 at the end of each of the next 4 years. Based on this deal, how much interest will Grummet pay over the life of the loan? A. $94,000 B. $80,000 C. $23,500 D. $14,000Using the information provided, what transaction represents the best application of the present value of an annuity due of $1? A. Falcon Products leases an office building for 8 years with annual lease payments of $100,000 to be made at the beginning of each year. B. Compass, Inc., signs a note of $32,000, which requires the company to pay back the principal plus interest in four years. C. Bahwat Company plans to deposit a lump sum of $100.000 for the construction of a solar farm In 4 years. D. NYC Industries leases a car for 4 yearly annual lease payments of $12,000, where payments are made at the end of each year.
- 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.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.Sharapovich Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the interest rate was 5% compounded annually. Sharapovich Inc. will make payments of $11,548.74 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.
- Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)
- For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase, and 5% in the second month following the purchase. What are the cash payments if it made the following purchases in 2018?For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a ten-year remaining legal life was purchased for $300,000. The patent will be usable for another eight years. B. A patent was acquired on a new smartphone. The cost of the patent itself was only $24,000, but the market value of the patent is $600,000. The company expects to be able to use this patent for all twenty years of its life.