Jonathan borrowed $8.000 at 5% annual compound interest. He agreed to repay the loan with 5 equal annual payments at end-of-years 1-5. How much of the annual payment is interest, and how much principal is there in each annual payment? (4.4)

Jonathan borrowed $8.000 at 5% annual compound interest. He agreed to repay the loan with 5 equal annual payments at end-of-years 1-5. How much of the annual payment is interest, and how much principal is there in each annual payment? (4.4)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 1EA: Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest...

See similar textbooks

Related questions

Q: Mark borrowed an amount of 10,865 from Brian and after 3 years, he borrowed again an amount of…

A: Equation of value : It is a concept where a sum of money has different values at different times.…

Q: j borrowed P250,000 . The terms of the loan are 10% interest for ten years with uniform payments. He…

A: Loan amount (PV) = P 250,000 Annual interest rate (r) = 10% Number of annual payments (n) = 10

Q: Debby Robinson borrows $10,000 to be repaid over 10 years with equal annual payments at 9%.…

A: A loan amortization schedule is the schedule of repayment of a loan with a bifurcation of interest…

Q: Andrew Bolkonsky borrows $200,000 to purchase a house for investment purposes on January 1st 2006.…

A: The concept of present value states that a sum of money is worth today more than the same sum of…

Q: 4-8. Jonathan borrowed $8,000 at 5% annual compound interest. He agreed to repay the loan with 5…

A: Loan is a contract between lender and borrower where lender provides funds to borrower for definite…

Q: Clark borrows P 600,000 at 15% compounded annually agreeing to repay the loan in 15 equal payments.…

A: Loan amount (PV) = P600,000 Interest rate (r) = 15% Number of payments (n) = 15

Q: Jeffery wei received a 6 year non subsidized student loan of 30,000$ at an annual interest rate of…

Q: Joshua borrowed $800 for one year and paid $40 in interest. The bank charged him a service charge of…

A: Annual Percentage Rate (APR) is the actual annual cost incurred by the borrower on the amount…

Q: Ten years ago, Mike took out a 20-year $110, 000 loan at an annual effective rate of interest of 5%.…

A: Loan is financial agreement where a person (lender) lends lump-sum money to other person (borrower)…

Q: John borrows $10,000 for 10 years and uses a sinking fund to repay the principal. The sinking fund…

A: Using excel RATE function

Q: Mr. Reyes borrows P600,000 at 12% compounded annually agreeing to repay the loan in 15 equal annual…

A: When the interest is computed on the principal amount as well as on the amount accumulated in the…

Q: on for 6 years and was charged om borrowed money from a simple interest at an annual rate of 8%. The…

A: Simple Interest can be calculated using the formula given below Simple Interest = (Principle x Rate…

Q: A person borrowed a certain amount at a simple interest of 3% annually and agreed with the creditor…

A: The question is based on the concept of Financial Management.

Q: Ken is paying P2,500 every 3 months for the amount he borrowed at an interest rate of 8% compounded…

A: Answer: Calculation of the amount that Ken borrowed: The amount that Ken borrowed will be equal to…

Q: Riley takes out a loan L of 3000 dollars to buy a car at an effective annual rate of interest of 6%.…

A: The mortgage is the obligation to pay back the debt amount taken as a loan for satisfying the need…

Q: Marla borrows $4,500 at 12 percent annually compounded interest to be repaid in four (4) equal…

A: I/Y = rate = 12%, NPER= Number of periods = 4 PV = Present value = 4500 CPT PMT = Payment =?

Q: How much of the original principal is still unpaid after he has made the 8th payment?

A: Get the annuity first using P = 600000,i =12%= 0.12 , n = 15 P= A*(1-(1+i)^-n)/i…

Q: Juan obtains a loan of $10,000 for 5 years, with interest at 8% effective, 3 years later obtains…

A: The present value is equivalent today of value of future payments based on time period and interest…

Q: Juan took out a $20,000 loan for 146 days and was charged simple interest. The total interest he…

A: We need to use simple interest formula to solve this problem Simple interest =Principal*Rate*Time

Q: -Nan Chen borrowed 90,000, agreeing to repay this sum in 20 equal end-of-year installments at 17…

A: Please refer to the image below.

Q: Andy borrowed P9000 from Randy today and P12000 two years after and made a partial payment of P7000…

A: The present value of the two payments will be equal to the outstanding balance at the end of the 3rd…

Q: Koenma borrows 500,000 at 15% compounded annually, and he agree to pay the loan in 18 equal annual…

A: Loan Amount P5,00,000 Loan period 18 Interest Rate 15% Present value of an ordinary annuity…

Q: a loaned an amount of 100,000Php payable in 15 equal quarterly instalments. The first payment was…

A: The loans are equated periodic payments that carry the payment of loan principal and payment of…

Q: Liam loaned an amount of 15,581 and he will pay it with an amount of 25,501 after 9 years. What is…

Q: 3. Timmy borrows $10,000 and agree to make annual payments for five years (beginning one year after…

A: Borrowed amount = $10,000 Interest rate = 0.07 First payment = $1,000 Second payment = $2,000 Third…

Q: A civil engineering student borrowed P40,000 to meet college expenses during his senior year. He…

A: We need to find the future value at the end of 3 years then use pmt function to calculate equated…

Q: While Jack only pays the interest of the 20,000 TL debt he has taken to repay in 15 years, he also…

A: Given information: Debt : 20,000 TL Time to repay : 15 years Interest rate for first 6 years : 9%…

Q: Kathy borrows $10,000 from the bank. For a four year loan, the bank requires annual end of year…

A: Present value of annuity = annual payment * [(1-((1+r)^-n)] /r

Q: You borrowed $5,000 to finance your educational expenses at the beginning of your junior year of…

A: The regular or lump-sum amount that is received or paid after a specific time period rather than…

Q: A family took out a 6-year, 12 percent loan from a lending institution for P 4,000. After six years,…

A: operative note Given, Amount borrowed 4000 Period 6 years Rate 12%

Q: A person borrowed $8000 from Rafidain Bank with compound interest of 9% annually and agreed with the…

A: Given, Amount borrowed $8,000 Interest rate 9% Term of loan is 5 years

Q: r. Reyes borrows P600, e loan in 15 equal annual payments. How much of the original principal is…

A: Loans are paid by the equal annual installments these annual installment carry the payment for the…

Q: .Interest rate per month,%? 2.Amount paid at the end of 3 years. 3.Amount to be paid at the end of 5…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts…

Q: Today, a businessman borrowed money to be paid in 10 equal quarterly payments starting at the end 2…

A: The amount borrowed is calculated as present value of quarterly payments. The present value of…

Q: To pay for his debt at 12% compounded semi-annually, Ruben committed for 8 quarterly payments of…

A: Annuities are the stream of equal payments which are presented to the individuals at regular…

Q: he annual interest rate on the loan is

A: Interest Rate: It is the rate used to compute the finance charge paid by the borrower for taking a…

Q: Angelo borrowed 58000 from his credit union. He agreed to repay the loan by making equal monthly…

A: using excel pv function

Q: Mr. Velasco got a 700,000 loan for the expansion of his business payable monthly in 4 years. How…

A: The monthly amortization on a loan refers to the monthly payment on the loan, which is needed to be…

Q: Tom Bond borrowed $6,600 at 6-% for three years compounded annually. What is the compound amount of…

A: An interest rate method in which current interest is computed by multiplying the interest rate by…

Q: ive years ago, Ms. Halliday received a mortgage loan from the Bank of Money for $60,000 at 7.8%…

A: Dear student, we need to use pv,fv.pmt functions in excel to solve this problem. You should apply…

Q: Ms Smith borrows 5000 at 5% annual effective interest, with payments at end of each year. The lender…

A: A loan amortization table is the schedule of loan repayment which includes the bifurcation of the…

Q: Gilbert got a loan of P100,000 from a local lending agency at 13% compounded annually. Their…

A: We can solve this in excel using the "goal seek" function. First of all make a loan amortization…

Q: Jose has a 15-year mortgage of $250,000 from his bank. The mortgage calls for equal monthly…

A: A mortgage loan is generally taken to purchase or maintain real estate. The borrower pays the lender…

Q: Timmy borrows $10,000 and agree to make annual payments for five years (beginning one year after…

A: Present value denotes the present worth of money by discounting the future cash flows whereas future…

Q: Tom Bond borrowed $6,800 at 8-% for three years compounded annually. What is the compound amount of…

A: Compound interest is the interest payble on both amount borrow/principal and accumulated interest.In…

Q: pay for his debt at 12% compounded quarterly, Ruben committed for 8 quarterly payments of P28,491.28…

A: The payment of debt is done by equal quarterly payment that includes the principal and interest…

Q: Daryl borrowed $5,440 for 4 years. If the loan's annual simple discount rate was 4.1%, how much did…

A: Amount borrowed (P) = $5,440 Time (T) = 4 years Rate (R) = 4.1% Total amount to be returned =…

Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

4-8. Jonathan borrowed $8.000 at 5% annual compound interest. He agreed to repay the loan with 5 equal annual payments at end-of-years 1-5. How much of the annual payment is interest, and how much principal is there in each annual payment? (4.4)

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

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

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.
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.
Jonathan borrowed $10,000 at 6% annual compound interest. He agreed torepay the loan with five equal annual payments of $2,374 at end-of-years1–5. How much of the annual payment is interest, and how much principalis there in each annual payment?
Hassan borrows AED 4,000,000 to be repaid over 15 years at 7 percent. What is the repayment of principal in the first three years and the total interest to be paid.
Debby Robinson borrows $10,000 to be repaid over 10 years with equal annual payments at 9%. Repayment of principal in the second year is:
Joan Messineo borrowed $50,000 at a 5% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual, end of year payments.
Joseph borrowed an amount of P512,390 and promise to pay every year for 5 years. He paid a fixed amount at the end of first year and the succeeding payments are P980 more than the previous payment. If the interest rate is 11.622% compounded quarterly, determine the following: 1.Interest rate per month,%? 2.Amount paid at the end of 3 years. 3.Amount to be paid at the end of 5 years, if he failed to pay the amount at the end of 3rd and 4th year. 4 Amount paid at the end of 3 years. 5.Amount to be paid at the end of 5 years, if he failed to pay the amount at the end of 3rd and 4th year.
A businessman borrowed P300,000 with interest at the rate of 6% compounded annually. He agrees to discharge his obligation by paying a series of 6 equal annual payments, the first being due at the end of 5th year. a. What is the value of the annual payments? b. What is the sum of all his payments? c. What is the actual interest that he paid?
Ma. Nochna Pula borrowed $10,000 at 6% annual compound interest. She agreed to repay the loan with five equal annual payments at end of each year. How much is the annual payment?
I borrow a 500,000 at 15% compounded annually, and he agree to pay the loan in 18 equal annual payments. How much of the original principal is still unpaid after I made the 10th payment.
Jeffery Wei received a 7 year non Subsidized loan of 32000 at an annual interest rate of 5.2%. What are Jeffery's monthly loan payments for this loan after he graduates in 4 years?
Mitchell deposited $700 at the end of every month into an RRSP for 8 years. The interest rate earned was 4.25% compounded semi-annually for the first 5 years and changed to 4.50% compounded monthly for the next 3 years. What was the accumulated value of the RRSP at the end of 8 years?