Problem # 2: Your company has a $500,000. loan for a new robotic machining center it just bought. The interest rate for this loan is 6% per year and your company's initial plan is to pay for the loan in exactly 30 years. Annual payment is made at the end of each year. (a) What is the Annual Payment your company has to pay at the end of each year? (b) Based on the initial annual payment calculated above, your company has now decides that it can afford to pay $50,000 per year, which is more than the initial annual payment. By paying $50,000 annually, how many payments (years) will the loan of $500,000. Be paid off? Assuming the same interest rate is used, i.e. 6% annually. (c) By paving $50.000 annually, how much is the last pavment?

Problem # 2: Your company has a $500,000. loan for a new robotic machining center it just bought. The interest rate for this loan is 6% per year and your company's initial plan is to pay for the loan in exactly 30 years. Annual payment is made at the end of each year. (a) What is the Annual Payment your company has to pay at the end of each year? (b) Based on the initial annual payment calculated above, your company has now decides that it can afford to pay $50,000 per year, which is more than the initial annual payment. By paying $50,000 annually, how many payments (years) will the loan of $500,000. Be paid off? Assuming the same interest rate is used, i.e. 6% annually. (c) By paving $50.000 annually, how much is the last pavment?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2P: Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for...

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