Jeffrey secured a 3-year car lease at 5.60% compounded annually that required her to make payments of $881.30 at the beginning of each month. Calculate the cost of the car if she made a downpayment of $2,000. $0.00
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- Using 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.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.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. 47,910
- 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. 33,700Del Hawley, owner of Hawleys Hardware, is negotiating with First City Bank for a 1-year loan of 50,000. First City has offered Hawley the alternatives listed here. Calculate the effective annual interest rate for each alternative. Which alternative has the lowest effective annual interest rate? a. A 12% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year b. A 9% annual rate on a simple interest loan, with a 20% compensating balance required and interest due at the end of the year c. An 8.75% annual rate on a discounted loan, with a 15% compensating balance d. Interest figured as 8% of the 50,000 amount, payable at the end of the year, but with the loan amount repayable in monthly installments during the yearScrimiger 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.
- Charles secured a 5-year car lease at 6.50% compounded annually that required her to make payments of $883.39 at the beginning of each month. Calculate the cost of the car if she made a downpayment of $2,250.Kevin purchased a car using a 3-year car lease at 7.90% compounded quarterly that required him to make payments of $606 at the beginning of each month. Calculate the cost of the car if he made a down payment of $2,500. Round to the nearest centCasey secured a 5-year car loan at 6.20% compounded annually that required him to make payments of $884.96 at the beginning of each month. Calculate the cost of the car if he made a downpayment of $3,250. Round to the nearest cent
- Gabrielle secured a 3-year car loan at 5.90% compounded annually that required him to make payments of $882.53 at the beginning of each month. Calculate the cost of the car if he made a downpayment of $2,250. Round to the nearest centVanessa purchased a car using a 5-year car lease at 6.30% compounded quarterly that required her to make payments of $571 at the beginning of each month. Calculate the cost of the car if she made a down payment of $1,750.Gavin and Holly purchased a $735,000 condominium in Toronto. They paid 20% of the amount as a down payment and secured a 25-year mortage for the balance. They negotiated a fixed interest rate of 3.3% compounded semi-annually for a 5-year term with repayments made at the end of every month. Their mortgage contract also stated that they may prepay up to 15% of the original principal every year without at interest penalty. At the end of the first year, in addition to the regular monthly payment, they made a lump-sum payment of $24,000. a. What was the principal balance at the end of the first year, prior to make the lump sum payment? b. By how much did the amortization period shorten after they made the lump sum payment at the end of the first year?
