Answered: Mary Smith took a car loan of $25,000…

Mary Smith took a car loan of $25,000 to pay back in 72 monthly installments at an interest rate of 12%. Compute the loan balance immediately after the 48th payment.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 16Q: Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual...

See similar textbooks

Related questions

Q: Yvette purchased a car and she obtained an 7 year term loan with an annual interest rate of 3.12%.…

A: An amortization schedule of a loan provides the breakdown of the monthly payments into their…

Q: Jesse borrowed from a bank at 5.92% compounded semi-annually; he settled the loan by repaying $3,055…

A: Interest rate is 5.92% compounded semi-annually Amount repaid is $3,055 every 6 month Time period is…

Q: If the finance charge on a loan made by Marjorie Young is $1,950 and the loan is to be paid in 24…

A: A loan amount represents the amount borrowed at a fixed interest rate to be repaid over a fixed…

Q: Mae purchased a home for ₱4,570,000 and obtained a 20-year loan with an annual interest rate of…

A: Given Information : Cost of home = 4,570,000 pesos Period of loan = 20 years Annual interest rate =…

Q: Bryan received a loan of $42,000 from the bank at 3.25% compounded monthly. If she had to repay $350…

A: Given that: Interest rate r = 3.25% per year = 0.2708% per month Period n =3 year= 36 months…

Q: YVette purchased a car and she obtained a seven year term loan with an annual interest rate of 3.84%…

A: Time Period of loan = 7 years or 84 months Interest Rate = 3.84%/12 = 0.32% per month Balance due…

Q: Jacob needed money for some unexpected expenses, so he borrowed $3,813.23 from a friend and agreed…

A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…

Q: What was Patrick’s monthly payment?

A: Re-payment of loan is a combination of principal loan amount and interest amount. Loan is paid as…

Q: A mother borrowed 137,254 with 0.09 interest monthly and promised to pay the amount by 17 equal…

A: Monthly Payment refers to the amount of instalment or payment which is being paid each month for a…

Q: A man borrowed a certain sum of money from a bank which charges interest at 18%, compounded…

A: The borrowed amount is calculated as the present value of payments

Q: Shelley Katz deposited $30,000 in a savings account at 5% interest compounded semiannually. At the…

A: Present value is the current worth of the future expected cash flows that an investor obtain from…

Q: ) the interest refund

A: When we buy goods on an installment basis we have to pay the purchase price in installments at…

Q: o help open up a jewelry store, Kaitlin borrowed money from her credit union. She took out a…

A: Time value of money is used to calculate the monthly instalments, rate of interest, total amount to…

Q: An individual is purchasing a $15,000 automobile, which is to be paid for in 48 monthly installments…

Q: Calculate the amount of cash payments Zetix was required to make in each of the two calendar years…

A: Calculation of Cash Payment = Amount of Notes Payable * Rate of Interest * 3 Months/12 Months Since…

Q: Caridad borrowed $17,500 at 11% ordinary interest for 160 days. After 60 days, she made a partial…

A: The final amount is computed by adding the loan amount and interest due and then subtracting the…

Q: Jacqueline received a $30,950 loan from a bank that was charging interest at 4.50% compounded…

A: The periodic payment is based on the loan amount, the periodic interest rate, and the number of…

Q: Salma borrowed $600from a bank for 2 years and was charged simple interest. The total interest that…

A: The annual interest rate on the loan is calculated using the simple interest formula given as below:…

Q: Mariah invested $10,000 in a bank certificate of deposit at a rate of 5% interest compounded…

A: Certificate of deposits is an investment product offered by banks. The interest rates on…

Q: May finances a refrigerator for $1,250 by taking out an installment loan for 48 months. The payments…

A: Given, The total number of months the payment has been made = 35 Total payment made so far =…

Q: Using the credit card, Abby purchased a bag amounting to ₱15,000 payable in 3 months at 12% per…

A: Table Showing Total Interest paid

Q: Luis paid off a loan by making a payment of $4,050, which included simple interest of 3% p.a. If he…

A: Payment amount after 6 months (FV)= $ 4050 Annual interest rate (R) = 3% Period (T) = 6 Months =…

Q: Yolanda deposited $1,600 at the end of each six months for 2 years in a savings account. If the…

A: Future value (FV) refers to the sum value of current assets of the company which is evaluated at a…

Q: 3.) Hamlet paid back $280 monthly installments to the bank for a loan. He earned 10.5% APR and had…

A: The problem is solved using actuarial method. Monthly instalment “R” = $280 APR = 10.5% Number of…

Q: Sixteen Months after borrowing money, Ronron Cayabyab Pays an interest of ₱8,426. How much did he…

A: Simple compound interest calculation is a technique for calculating the portion of interest paid to…

Q: Amy has accumulated a credit card debt of $7,100 and she has decided to pay it off over the next 3…

A: The question is based on the concept of repayment of loans on reducing balance method. The loan…

Q: Nesrin, purchased a new car for $9,420, paying $3,000 down payment and agreeing to 12 monthly…

A: Credit rate: The amount charged for a credit loan or purchase is usually represented as a…

Q: A woman went to the Beneficial Loan Company and borrowed $10,000. She must pay $323.53 at the end of…

A: EAR or Effective annual rate is yearly rate computed after taking into account all the compounding…

Q: Sally buys a house. She has limited initial funds, so she agrees to make 360 monthly payments as…

A: Nominal interest rate: It is the rate in which the effect of inflation has not been considered.

Q: Miss Evilla borrowed money from a bank. She receives from the bank P1,340.00 and promised to pay…

A: Banker's discount is the discount amount calculated on the future value of payable.

Q: Ryan invests $4400 in two different accounts, the first account paid 8%, the second account paid…

A: The simple interest is calculated by multiplying interest rate by principal amount for a certain…

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: A mother borrowed 180,378 with 0.09 compounded monthly and promised to pay the amount by 20 equal…

A: The monthly payment can be calculated by using the present value of annuity function

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: Marisol finances a sports car for $27,700 by taking out an installment loan for 36 months. The…

A: Amount financed = $27,700 Number of instalments = 36 Monthly payment = $998.61 Payment made = 21…

Q: Matthew has a $32,500 student loan at 4.80% compounded quarterly amortized over 12 years with…

A: monthly interest rate = (1+quarterly rate)^(1/3) -1 = (1+4.80%/4)^(1/3) -1 =…

Q: Linda borrowed money from a bank to buy a fishing boat. She took out a personal, amortized loan for…

A: Present Value of Ordinary Annuity refers to the concept which gives out the discounted or today's…

Q: Kia deposited $1,200, at the beginning of each year for 30 years in a credit union account. If the…

A: The series of payments to be paid at the beginning of every period is called annuity due.

Q: Ali took a loan of 180000 to buy an apartment the bank offered the loan with an apr of 16 compounded…

A: Amount of Annuity "A" is 31,280 Total number of annual payments are 30 Loan amount is 180,000…

Q: Ahmad took out a loan for $7500 and was charged simple interest at an annual rate of 4.7%. The total…

A: Simple Interest = Principal * Rate of interest * [ Number of days / 365 ]

Q: Determine the monthly payment.

A: The time value of money is a concept that states that a sum of money has more value in the current…

Q: Moxie Fox deposited $30,000 in a savings account at 6% interest compounded semiannually. At the…

A: As period goes on compounding interest increases with more compounding during the period.

Q: Rita deposited $8,000 in a savings account that provides for interest at the rate of 16% compounded…

A: Compound Interest=(A)=P1+rnntWhere,P= the principal, amount investedA= the new balancet= the…

Q: Jamie borrowed $900 from the Essex District Credit Union. The loan agreement provided for repayment…

A: As per the loan agreement repayment of the loan is to be paid in four equal monthly installments…

Q: Jack has borrowed money from his financial institution, and has agreed to pay $200 at the end of…

A: To calculate amount borrowed when monthly payments are given, present value of annuity formula will…

Q: Morgan received a $29,050 loan from a bank that was charging interest at 3.25% compounded…

A: Loan is the value or an amount which is borrowed from other sources like banks for a finite period…

Q: Muhammad borrowed $ 5,000 from a bank 7% annual interest, provided that Muhammad pays the loan in…

A: Annual payments for the loan is calculated y present value of annuity formula. Total interest on…

Q: Janie Curtis borrowed $25,000 from a bank at an interest rate of 12% compounded monthly. This loan…

A: The present value of the annuity is the current worth of a cash flow series at a certain rate of…

Q: Irene makes six annual deposits of $2,000 in a savings account that pays interest at a rate of 4%…

A: Annual deposit (PMT) = $2,000 Interest rate = 4% Number of periods = 6

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

Mary Smith took a car loan of $25,000 to pay back in 72 monthly installments at an interest rate of
12%.
Compute the loan balance immediately after the 48th payment.
$18,560
$8,132
$10,383
$12,500

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

Step 2

Step 3

Step 4

Step 5

Trending now

This is a popular solution!

Step by step

Solved in 5 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

Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at the end of the month for 12 months. The interest rate is 12% annually. If the monthly payments are $888.49, what is the journal entry to record the cash received on Jan. 1 and the first payment made on Jan. 31?
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.
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
Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from the bank in the amount of $310,000. The terms of the loan are 6.5% annual interest rate, payable in three 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 February 24, and the entry for payment of the short-term note and final interest payment on April 24. Round to the nearest cent if required.
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?
Cost of Bank Loan On March 1, Minnerly Motors obtains a business loan from a local bank. The loan is a 25,000 interest-only loan with a nominal rate of 11%. Interest is calculated on a simple interest basis with a 365-day year. What is Minnerlys interest charge for the first month (assuming 31 days in the month)?
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.
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.
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.
Pickles R Us is a pickle farm located in the Northeast. The following transactions take place: A. On November 6, Pickles borrows $820,000 from a bank to cover the initial cost of expansion. Terms of the loan are payment due in six months from November 6, and annual interest rate of 3%. B. On December 12, Pickles borrows an additional $200,000 with payment due in three months from December 12, and an annual interest rate of 10%. C. Pickles pays its accounts in full on March 12, for the December 12 loan, and on May 6 for the November 6 loan. Record the journal entries to recognize the initial borrowings, and the two payments for Pickles.
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.
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