Question 1Q1(a) Create simple examples to illustrate the following concepts.i.Time value of moneyii.Effective interestSinking Fund111.iv.Amortized loanQ1(b) Assuming you will be able to deposit GHC6000 at the end of each of the next four years in a bank accountpaying 9% interest. You currently have GHC6000 in the account. How much will you have in four years?Q1(c) After carefully going over your budget, you have determined you can afford to pay GHC854 per monthtoward a new car. You call up your local bank and find out that the going rate is 1% per month for 48 months.How much can you borrow?Q1(d) Suppose, a business takes out a GHC7000, 7-year loan at 9%. If the loan agreement calls for the borrowerto pay the interest on the loan balance each year and to reduce the loan balance each year by GHC 1000. Howwould the loan repayment be? Illustrate with the aid of a table.

Effective interest rate With stated interest rate (r) and number of compounding in a year (m), the…

Answered: Q1(a) Create simple examples to…

Q1(a) Create simple examples to illustrate the following concepts. i. Time value of money ii. Effective interest iii. Sinking Fund iv. Amortized loan

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

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