Answered: Find the future value of a simple…

Find the future value of a simple interest loan where $1,950 is borrowed at a rate of 7.9% from October 7 through October 27. Round your answer to the nearest cent (2 decimal places). $

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 25E

See similar textbooks

Related questions

Q: Cullumber Clinic is considering investing in new heart-monitoring equipment. It has two options.…

A: Net Present Value - It is the difference between the present value of cash outflow and present value…

Q: Tom wishes to purchase a property that's been valued at $400,000. He has 15% of this amount…

A: A mortgage refers to a covered loan that an individual borrows to purchase a property. The property…

Q: onsider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a…

A: The cash flow to the equity holders will be after doing all payments including the interest on debt…

Q: portfolio

A: a) To construct a portfolio that satisfies the first two conditions of Redington’s immunization…

Q: Your firm has a target debt ratio of 30%. Cost of debt (RB) is 6%. The risk-free rate is 3% and the…

A: Target debt ratio = 30% Cost of debt = 6% Risk free rate = 3% Expected market risk premium = 6%…

Q: Fey Fashion paid the following dividends from 2013 to 2019: 2013 2014 2015 2016 2017 2018 2019 $1.00…

A: Please note that under Answering Guidelines only 1 question can be solved. Kindly repost the 2nd…

Q: Which of the following is NOT true? In risk-neutral valuation the risk-free rate is used to discount…

A: Risk-neutral valuation produces a valuation that is correct in all situations not just those where…

Q: Consider a zero-coupon bond issued on 1st of March 2017 with maturity in two years and face value…

A: A bond refers to an instrument used for raising debt capital from investors rather than traditional…

Q: If the present discounted value of $1,562 received 7 years from now is $1,123, what is the interest…

A: Here, Particulars Values Future value (FV) $1,562.00 Present discounted value (PV)…

Q: XYZ Sleep Disorder Clinic invests $106,944 for five years to retire a debt. Assuming the clinic can…

A: It is a case of investing the amount now so that it calculates a future value, used to retire the…

Q: NAME Herbalife Nutrition Herc Holdings Heritage Insurance Holdings HRTG Hersha Hospitality Trust CIA…

A: Amount = $5,000 Hess Midstream Partners closing price = $17.87 Net Change = 0.25 PE ratio = 14.60…

Q: The value in pounds of a fund at time t = 0 is V0 = 50, 000. After one year (at t = 1) it has…

A: The time-weighted rate of return is the geometric mean of return for each period.

Q: Your foreign exchange trader in the United States has quoted the following rates for the Swiss…

A: Here, Swiss Frans/USD Spot 1 Month 3 Month 6 Month $0.5965/72 50/61 127/143 242/267

Q: Determining the Cost of Insurance. Suppose you are 45 and have a $50,000 face amount, 15-year,…

A: Face Value = $50,000 Annual Premium = $1,000 Cash value of the policy = $12,000 Time period = 15…

Q: The firm wishes to estimate the beta of a portfolio that consists of two assets X and Y. The…

A: Beta of the portfolio = wX * Beta_X + wY * Beta_Y Where: wX = Weight of asset X in the portfolio,…

Q: You were recently hired by Scheuer Media Inc. to estimate its cost of capital. You obtained the…

A: Cost of Equity: cost of equity is the minimum required rate of return that is expected to be…

Q: Solve by Formula. Three years ago, ABC Company issued 10-year bonds that pay 5% semiannually.…

A: Bonds are fixed-income earning instruments where the investor lends money to the company in exchange…

Q: st rate. Between now and year 1 (period 0 and period 1), uncertainty will be resolved immediately…

A: With expected interest rate (r) and period (n), the expected value of the zero coupon bond is…

Q: Thomas has $1,000 in his bank account today to spend on a TV. Thomas needs exactly $1,070 to…

A: This is based on the concept of the time value of money. Money invested or deposited today grows in…

Q: The BOD of ABC Co. is dissatisfied with last year's Retur on equity of 15% and wants to increase it…

A: Based on DuPont equation return on equity depends three basic components and to change in return on…

Q: 1. What must be the beta of a portfolio with E(rp) = 18%, if rƒ= 6% and E(rm) = 14%? 2. The market…

A: Using the CAPM formula, we can determine the expected return of the stock. By rearranging the above…

Q: Find the period Thomas has $1,000 in his bank account today to spend on a TV. Thomas needs exactly…

A: This is based on the concept of time value of money. Money invested or deposited today grows in…

Q: Smashed Pumpkins Company paid $136 in dividends and $568 in interest over the past year. The company…

A: Dividends = $136 Interest = $568 Retained Earnings = $474 Account Payable = $594 Sales = $16265…

Q: Augustine Company's stock has 47 million shares outstanding and a current market price of $50. Its…

A: Number of Stock = n = 47 million Market price of stock = ps = $50 Market Value of debt = d = $245…

Q: A stock will pay a dividend of $1.1 and is expected to be worth $55.7 in 1 year. If the stock is…

A: Dividend = d = $1.1 Next year expected price of stock = p1 = $55.7 Current price of stock = p0 =…

Q: Finance Find the savings plan balance after 18 months with an APR of 6% and monthly payments of…

A: As per the given information: Monthly payments - $800APR - 6%Period - 18 months To determine:…

Q: hich statement about book value per share (BVPS) is true??? A. Market price per share usually…

A: When company start the operations than company issues shares and they are issued at very low prices…

Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…

A: As per the given information: Risk free rate (rf) - 5.5%Correlation between the fund returns -…

Q: When the Black-Scholes and binomial tree models are used to value an option on a non-…

A: Black-Scholes model: The binomial model is a discrete-time option pricing model that provides an…

Q: Kate and her brother Rustin own a piece of property in Dallas as tenants in common valued at…

A: Co-owners of a tenancy refers to multiple individuals or entities who jointly hold ownership rights…

Q: Approximately, what is the value of (P) if F=114120, n=8 years, and i= 7% per year? O a. 79703 b.…

A: Present value is the current value of certain amount of future money at a required rate of return or…

Q: Which of the following is an example of a capital expenditure? Select all that apply A- New…

A: Capital Expenditure is that expenses which is incurred by the company on long term assets such as…

Q: The company expects to sell 2,500 units, give or take 5%. The expected cash variable cost per unit…

A: Operating cash flows are after tax net profit which includes revenues and expenses of operating…

Q: Please use the following information to answer the next THREE questions. Kaplan Brewery is…

A: After tax salvage value is calculated as shown below. After tax salvage value=Market value-Tax…

Q: Consider the following two projects: Project A B Year 0 Cash Flow -100 -73 C. 1.7% d. 17.3% Year 1…

Q: Franklin Co has a dividend payout ratio of 0.8 and reinvests the remainder of earnings in projects…

A: Dividend Payout Ratio = dp = 0.8 Growth rate = g = 13% Next year Earning Per Share = EPS1 = $2.85…

Q: Suppose intel stock has a beta of 0.80, whereas Boeing stock has a beta of 1.15. If the risk-free…

A: Intel Beta = ib = 0.89 Boeing Beta = bb = 1.15 Risk free rate = rf = 3.1% Market return = rm = 10.1%

Q: Islander Corporation's common stock will pay a dividend of $3.50 one year from now. You plan to buy…

A: Next year dividend = d1 = $3.50 Next year price of stock = p1 = $70 Rate of return = r = 18%

Q: a) Calculate the free cash flow generated by a firm which has earnings before interest and taxes of…

A: Valuation of firm refers to valuating management efficiency to earn for the capital invested.…

Q: When discounting Free Cash Flow to Firm (FCFF), should the Weighted Average Cost of Capital (WACC)…

A: Introduction: Free cash flow to firm (FCFF)-This is the amount of cash flow available to all the…

Q: Below is a major portion of the income statements of KTA Inc. for 2020 and 2021: Sales Cost of Sales…

A: Here, Particulars 2020 2021 Sales 80000 97200 Cost of sales 50000 72000 Gross margin 30000…

Q: Current stock price for XYZ Interest rate Dividend rate Option PUT PUT PUT PUT CALL CALL CALL CALL…

A: Both call-and-put options provide leverage and flexibility to investors and traders, allowing them…

Q: The gross profit percentage is equal to: A. Net operating income/Sales B. Cost of goods sold/Sales…

A: Gross profit = sales - cost of goods sold. Gross profit % = Gross profit ÷ sales While calculating…

Q: The required return on the stock is 8.87%. Given the cash flows in the summary quote, what is the…

A: Dividend - This is the amount which is paid by the company to its shareholders. Dividend includes…

Q: T O P I C : A s s e t V a l u a t i o n M o d e l s f o r M e r g e r s a n d A c q u i…

A: The ratio of exchange is a key component in the valuation of a target company during a merger or…

Q: You have $7000 to invest. The mutual fund you are considering offers two classes of shares. Class A…

A: Class A Mutual fund Class B Mutual fund Investment Amount 7000 Investment Amount 7000…

Q: Identify which of these statements regarding real estate limited partnerships (RELPs) and real…

A: Both RELPs and REITs give investors the option to purchase real estate without personally owning and…

Q: Briefly define GDP and GDP-P. Explain how would you use PPP to understand financials in a country.

A: Gross Domestic Product (GDP) is a fundamental concept in economics that serves as a measure of a…

Q: . Calculate the payback period. 2. Calculate the accounting (simple) rate of return. 3. Calculate…

A: First, we need to build the cash flow over the years using the formula below:Year 0 = Initial…

Q: Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below. The…

A: Net present value is the modern method of capital budgeting that is used to determine the present…

Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

Subject :- Account

Find the future value of a simple interest loan where $1,950 is borrowed at a rate of 7.9% from October 7
through October 27.
Round your answer to the nearest cent (2 decimal places).
$

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Information Provided:

VIEW

Step 2: Computation:

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
Calculating interest and APR of installment loan. Assuming that interest is the only finance charge, how much interest would be paid on a 5,000 installment loan to be repaid in 36 monthly installments of 166.10? What is the APR on this loan?
Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
Use Future Value and Present Value Tables to Apply Compound Interest to Accounting Transactions Kristen Quinn makes equal deposits of $500 semiannually for 4 years. Required: What is the future value at 8%? (Note: Round answers to two decimal places.)
Everglades Consultants takes out a loan in the amount of $375,000 on April 1. The terms of the loan include a repayment of principal in eight, equal installments, paid annually from the April 1 date. The annual interest rate on the loan is 5%, recognized on December 31. (Round answers to the nearest cent, if needed.) A. Compute the interest recognized as of December 31 in year 1. B. Compute the principal due in year 1.
Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?
Campus Flights takes out a bank loan in the amount of $200,500 on March 1. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 8%, recognized on December 31. (Round answers to the nearest whole dollar if needed.) A. Compute the interest recognized as of December 31 in year 1 rounded to the whole dollar. B. Compute the principal due in year 1.
Calculating and comparing add-on and simple interest loans. Eli Nelson is borrowing 10,000 for five years at 7 percent. Payments, which are made on a monthly basis, are determined using the add-on method. a. How much total interest will Eli pay on the loan if it is held for the full five-year term? b. What are Elis monthly payments? c. How much higher are the monthly payments under the add-on method than under the simple interest method?