Sally's shoes owe $85,000 with interest at 13% c.s.a. for 3 years, due in 6 months. This debt is communted into a payment of "x" dollars due in 1 year and a payment of $100,000 due in 2 years, and they set the N.R. = 9% c.q. find "x" to the nearest dollar. please show work of how to do this

Sally's shoes owe $85,000 with interest at 13% c.s.a. for 3 years, due in 6 months. This debt is communted into a payment of "x" dollars due in 1 year and a payment of $100,000 due in 2 years, and they set the N.R. = 9% c.q. find "x" to the nearest dollar. please show work of how to do this

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

See similar textbooks

Related questions

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

A: Quarterly payment (P) = P 2000 Annual interest rate = 10% Quarterly interest rate (r) = 10%/4 =…

Q: DAMIPERA Corporation, a lending institution, provided a loan to LAPERA Company for Php5,000,000 on…

A: On 01.01.2020, DAMIPERA corporation provided loan to LAPERA company = Php5000000 Loan term = 5 years…

Q: Dr. Sanchez borrowed P3, 500, 000 at 8% for 10 years. The loan stipulated that the following…

A: Here, Borrowed Amount is P3,500,000 Interest Rate is 8% Time Period is 10 years Payment from year 1…

Q: Halep Inc. borrowed $26,000 from Davis Bank and signed a 4-year note payable stating the interest…

A: Notes payable represent the obligation raised by the corporation by issuing notes to the lender…

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: Halep Inc. borrowed $54,000 from Davis Bank and signed a 4-year note payable stating the interest…

A: Given: Period = 4 years Payment = $14,876.46 Loan = $54,000 Interest rate = 4%

Q: Mariel owes P30,000 in 5 months with interest at 7% and another P14000 is due in 11 months with…

A: Data given: Mariel owes P30,000 in 5 months and P14000 is due in 11 months. New tenure = 9…

Q: Uncle Ben InC. arranged a P9,000,000 revolving credit agreement with a group of banks. The firm paid…

A: Revolving Credit: A line of credit that allows the borrower to borrow funds up to a pre-set limit at…

Q: CHuee Company borrows $40,000 from the local bank at 8% interest. The term of the note is 5 years,…

A: Interest means the extra amount paid over and above the principal amount of loan. Total amount…

Q: Vhutshilo won R165 000 and decided to deposit 65% of this amount in an account earning 8,25%…

A: In this question we need to compute the accumulated amount after 5 years i.e. future value after 5…

Q: Vanessa initially borrowed $6,400 from RBC Bank at 3.64% compounded semi-annually. After 4 years she…

A: The future value function can be used to determine the future value of a sum at a given discount…

Q: Zetix borrowed $20,000 on a one-year, 10 percent note payable from the local bank on March 1.…

A: Notes Payable: Noes payable is a liability account where borrower makes written promise to lender…

Q: Halep Inc. borrowed $32,000 from Davis Bank and signed a 4-year note payable stating the interest…

A: Note payable refers to a negotiable instrument. It represents the claim amount due on the acceptor.…

Q: Michael owes $30,000 bearing interest at 8% c.a. for 3 years due in 3 months. This debt is commuted…

A: Compounded monthly: It means interest is charged & added to the principal amount after every…

Q: On March 1, 2012, Jason's Deli loaned $12,000 to Mark Johnson for one year at 5 percent interest.…

A: Introduction: Interest refers to the amount charged by the lender on the lent amount. The borrower…

Q: A businessman borrowed P220,000 with interest at the rate of 4.2% compounded semi-annually. He…

A: The future value of money is the amount of money that will be worth at some point in the future if…

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

A: Borrowed amount (PV) = 500,000 Interest rate (i) = 15% Period (t) = 18 Years

Q: Sharapova Inc. borrowed $50,000 from Kerber Bank and signed a 5-year note payable stating the…

A: Laon amortization schedule means where repayment during the life of loan is written with interest.…

Q: Leroy Inc. signed a 3 year loan for $80,000 with interest rate of 10%. What are the three annual…

A: Introduction: Interest amount = Interest is calculated on Principal amount. Formula = Principal…

Q: A company is buying a new machine for $100,000. Bank credit is used to finance the entire amount at…

A: Loan Amount = $100,000 Interest Rate = 10% Time period = 3 Years

Q: Donna makes annual end of year payments of $5,043.71 on a four year loan with an interest rate of 13…

A: Present Value = Annuity * {1- 1/ [(1+rate)^year] } / rate where, rate = 13% or say 0.13 year = 4…

Q: Madison initially borrowed $8,200 from TD Canada Trust at 3.45% compounded semi- annually. After 2…

Q: On quesiton C: Johnson’s borrowed $282,000 at a(n) 9 percent annual interest rate on April 1 of the…

A: Adjusting entries are those journal entries which are passed at the end of accounting period in…

Q: A man owes Php 12,000 today and agrees to discharge the debt by equal payments at the beginning of…

A: The amount which is deposited or paid at the beginning of each period is called as annuity due. The…

Q: Survey Corps lends money to improve their equipment, P10,000 due in 2 years, P25,000 due in 3 years,…

A: Given: Year Amount 2 10000 3 25000 5 50000

Q: Five years ago, Ms. Halliday received a mortgage loan from the Bank of Nova Scotia for $60,000 at…

A: Given information: Mortgage amount is $60,000 Interest rate is 7.8% Amortization period is 25 years…

Q: Jack has borrowed $1,000,000 from MQ Bank for 10 years at an interest rate of j2=3.53%. He will make…

A: Given: Borrowed Amount = $1,000,000 Repayments at the start of the year : Year 1 = $83,000 Year 2 =…

Q: A debt of $10,000 is to be repaid by equal Monthly payments at the end of every month for 1 year.…

A: Debt refers to the sum of money borrowed and later repaid along with interest. It can be repaid in…

Q: On January 1, 2020, La Petite Macaron, a local French bakery, borrowed $84,000 from the bank. Int…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: A man owes Php 15,000 with interest at 8% payable semi-annually. Equal payments at the beginning of…

A: Firstly we shall calculate the Semiannual payment using Excel's =PMT formula Then we shall prepare…

Q: Sonia invested P 2,100 and left it for 9 years where the time in which the principal was withdrawn.…

A: Compounding is a technique which is used to compute the future value (FV) of the present amount by…

Q: Jack has borrowed $1,000,000 from MQ Bank for 10 years at an interest rate of j2=3.11%. He will make…

A: Loan Amount $ 1000,000 Interest rate 3.11% Annual Installment 10

Q: Canliss Mining Company borrowed money from a local bank. The note the company signed requires five…

A: Canliss Mining Company borrowed amount equals to Present value of all future payment of 10000 at the…

Q: Dan took a loan of P560,000 from L. A. Finance to purchase a car. If the company charges compound…

A: We need to use compound interest formula to calculate amount payable at the end of year 5.The…

Q: Mr. Bean borrowed P600,000 from Maligaya Lending Corp. for 6 years at 12%. At the end of 6 years, it…

A: As per time value of money concept, a sum of amount invested today will have more value in the…

Q: A couple who borrow $70,000 for 15 years at 8.4%, compounded monthly, must make monthly payments of…

A: formula for remaining balance: remaining balance=princial×1+rmn-pmt×1+rmn-1rm where, r = rate of…

Q: Canliss Mining Company borrowed money from a local bank. The note the company signed requires five…

A: Canliss would have borrowed an amount equal to the present value of $10,500 paid for 5 years @ 5%.…

Q: Holden borrows $209,433 from a financial institution with equal end-of-year payments of $24,600. of…

A: Loans are given by the financial institutions to purchase the assets to the customers and the…

Q: Jill borrows $300,000 for 10 years at a fixed interest rate of i % p.a (EAR). If the loan is repaid…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Locust Inc. owes $20,000.00 to be repaid by monthly payments of $510.00. Interest is 6%…

A: Since you have asked a multiple subpart question, we will answer the first three subparts for you.…

Q: A P350,000 debt is released at 6% compounded bi-monthly and is to be paid bi-monthly for 5 years.…

A: Debt = 350,000 Interest rate = 6%/6 = 1% per bi monthly period Total Time Period = N = 5 years i.e.…

Q: Halep Inc. borrowed $36,000 from Davis Bank and signed a 4-year note payable stating the interest…

A: The note payable is issued to creditor as a promissory note to the creditor to make payment on time.…

Q: Braddy Machinery sold some equipment for $8,500 and established a promissory note requiring 6.50%…

A: Frist we need to calculate maturity value of promissory note by using this formula Maturity value…

Q: Dandil owns two debt payments - a payment of $5049 that was due today and a payment of 1906 due in…

A: Time value of money: The time value of money is the idea that the value of money received today will…

Q: 1. A man borrows Php 64,000 from a loan association. In repaying this debt, he has to pay Php 4000…

A: Simple Interest is calculated directly on the principal for the respective period of time. Simple…

Question

Sally's shoes owe $85,000 with interest at 13% c.s.a. for 3 years, due in 6 months.

This debt is communted into a payment of "x" dollars due in 1 year and a payment of $100,000 due in 2 years, and they set the N.R. = 9% c.q.

find "x" to the nearest dollar.

please show work of how to do this

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 3 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

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.
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
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.
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.
Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.
Dexter Construction Corporation is building a student condominium complex; it started construction on January 1, Year 1. Dexter borrowed 2.5 million on January 1 specifically for the project by issuing a 10%, 5-vear, 2.5 million note, which is payable on December 31 of Year 3. Dexter also had a 12%, 5-year, 3 million note payable and a 10%, 10-year, 1.8 million note payable outstanding all year. Calculate the weighted average interest rate on the non-construction-specific debt for Year 1. RE10-9 Refer to RE10-8. In Year 1, Dexter incurred costs as follows: Calculate Dexters weighted average accumulated expenditures.
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?
McMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they take out a long-term loan in the amount of $800,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 9%. Each year on December 31, the company pays down the principal balance by $50,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of 5,000 at the end of each of the next 5 years. Assume a prevailing interest rate of 15%. The present value of an ordinary annuity of 1 at 15% for 5 periods is 3.35. The future amount of an ordinary annuity of 1 at 15% for 5 periods is 6.74. The present value of 1 at 15% for 5 periods is 0.5. How much should Electro record as the cost of the machine? a. 12,500 b. 16,750 c. 25,000 d. 33,700
Compound Interest Issues You are given the following situations: 1. Thomas Petty owes a debt of 7,000 from the purchase of a boat. The debt bears 12% interest payable annually. Thomas will pay the debt and interest in 5 annual installments beginning in 1 year. Calculate the equal annual installments that will pay off the debt and interest at 12% on the unpaid balance. 2. On January 1, 2019, John Cothran offers to buy Ruth Houses used tractor and equipment for 4,000 payable in 12 equal semiannual installments which are to include payment of 10% interest on the unpaid balance and payment of a portion of the principal with the first installment to be made on January 1, 2019. Calculate the amount of each of these installments. 3. Nadine Love invests in a 60,000 annuity at 12% compounded annually on March 1, 2019. The first of 15 receipts from the annuity is payable to Love on March 1, 2029, 10 years after the annuity is purchased and on the date Love expects to retire. Calculate the amount of each of the 15 equal annual receipts. Required: Using the appropriate tables, solve each of the preceding situations.
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.
On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10% interest rate. Each annual payment is in the amount of $39,569 and payment is due each Dec. 31. What is the journal entry on Jan. 1 to record the cash received and on Dec. 31 to record the annual payment? (You will need to prepare the first row in the amortization table to determine the amounts.)