John borrows $15000 for 5 years at an annual effective interest rate of %9. At the end of each year she pays the lender $1000 and deposits a level amount necessary to repay the loan in full after 5 years into a sinking fund that earns an annual effective interest rate of %4. Determine the total annual payment that John makes.

John borrows $15000 for 5 years at an annual effective interest rate of %9. At the end of each year she pays the lender $1000 and deposits a level amount necessary to repay the loan in full after 5 years into a sinking fund that earns an annual effective interest rate of %4. Determine the total annual payment that John makes.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter5: Introduction To Business Expenses

Section: Chapter Questions

Problem 61P

See similar textbooks

Similar questions

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.
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?
If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.