2 Maula-pae Weaks urgently needed $100,000 to pay lawyer-fees after illegally withdrawing a letter, and was forcedto borrow at 15% nominal from Krowley Kash-pit. Loan conditions were: monthly compounding, and repay withequal monthly payments over 3 years. Mr. Weaks wins a Quick-pick Cash-pot after the initial 12 payments, andwants to now pay off the remainder in uniform quarterly payments over the remaining 2 years; the original 15%nominal interest compounded monthly still applies. Determine the quarterly-payment amount.

First we need to calculate size of monthly payment PMT =PV*i1-1(1+i)n where PV =loan amount…

Answered: Maula pae Weaks urgently needed…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

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Similar questions

Del 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 year
Maula-pae Weaks urgently needed $100.000 to pay lawyer-fees after illegally withdrawing a letter, and was forced to borrow at 15% nominal from Krowley Kash-pit. Loan conditions were: monthly compounding, and repay with equal monthly payments over 3 years. Mr. Weaks wins a Quick-pick Cash-pot after the initial 12 payments, and wants to noOw pay off the remainder in uniform quarterly payments over the remaining 2 years; the original 15% nominal interest compounded monthly still applies. Determine the quarterly-payment amount.
Chuck Ponzi has talked an elderly woman into loaning him $35,000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $35,000 with an annual interest rate of 11% over the next 15 years. Determine the cash flow to the woman under an interest-only loan, in which Ponzi will pay the annual interest expense each year and pay the principal back at the end of the contract. What is the amount of payment that the woman will receive at the end of the loan in year 15?
Jim made a down payment of 2500 dollars toward the purchase of a car. To pay the balance of the purchase price, he has secured a loan from his bank at the nominal rate of 4 percent per year compounded monthly. Under the terms of his finance agreement, he is required to to make payments of 290 dollars per month for 48 months.What is the cash price of the car? (round to nearest cent) How much, in total, will Jim spend on interest charges? (round to nearest cent)
Dominic Torreto borrows $300,000 from a lending company in his hometown at 12% interest compounded monthly. To fulfill his obligation to repay the loan, Dominic agreed to start paying the six (6) equal monthly payments starting next month. If Dominic failed to pay the 2nd and 3rd monthly amortization, how much shall be the required single payment on the fifth month to fully pay his outstanding obligation? Supposed that he will still not be able to pay the single total payment on the Fifth month as stated in question 1 above, and assuming further that both parties agree that the outstanding obligations shall instead be paid in 7 equal monthly installments, at 15% compounded monthly, starting on the 9th month, what will the value of such monthly installment be?
Darwin is a young entrepreneur trying to keep his business afloat. He has missed two payments to acreditor. The first was for $3,485 seven months ago, and the second was for $5,320 last month.Darwin has had discussions with his creditor, who is willing to accept $4,000 one month from now and asecond payment in full six months from now.If the agreed upon interest rate is 7.35% compounded monthly, what is the amount of the secondpayment?
Mr. Nina borrows $425,000 from the bank at 3.5% per year interest over a 30-year period. He can make a monthly month-end payment of $1,400 and would like to make a balloon payment at the end of the 30-year period. What would be the size of the balloon payment? $218,058 $323,069 $433,197 $548,512 Please show how to work this out in Excel if possible?
Donald buys a machine from Biden Manufacturer and signs a contract that calls for a down payment of $18000 and for the payment of $800 at the end of every month for 8 years. The interest rate is 12% p.a. compounded quarterly. If Joe missed the first 15 payments of $800, what must he pay at the time the 16th payment is due to discharge his indebtedness completely?
While buying a new car, Alexander made a down payment of $1,100 and agreed to make month-end payments of $290 for the next 5 years and 7 months. She was charged an interest rate of 4% compounded semi-annually for the entire term.a. What was the purchase price of the car?Round to the nearest centb. What was the total amount of interest paid over the term?
John took a personal loan of $100,000 from the bank at a nominal interest rate of 6% per year compounded monthly. The loan is to be repaid in 4 years with 48 equal end-of-month payments George takes a loan of $50,000 from the bank at a nominal interest rate of 9% per year compounded monthly. If George can only afford to pay $1,038 per month, how many months are needed for George fully repay the loan?
While buying a new car, Austin made a down payment of $1,000.00 and agreed to make month-end payments of $270.00 for the next 3 years and 4 months. If she was charged an interest rate of 5.00% compounded quarterly for the entire term, answer the following, rounding to the nearest cent. 1. What was the cost of the car when Austin purchased it? Round to the nearest cent 2. What was the total amount of interest paid over the term? Round to the nearest cent
David is borrowing $150,000 from Hartford Bank to open Road and Off-Road Bicycle Shop. David expects it to take a few years before the shop earns a sizeable profit, so he has arranged for no payments on the loan until the end of the fourth year. The first and second payments are due 4 and 5 years, respectively, from today in the amounts of $20,000 each. Starting at the end of year 6, a series of 4 annual end-of-year payments will be made. The first of these is $X. Each subsequent payment is $8,000 greater than the previous payment. Draw the cash flow diagram from David’s perspective.

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