Question
Asked Nov 22, 2019
1 views
  1. Smith Farm Trust made a farmer a loan of $1,200 at 12% for three years compounded annually. Find the compound amount and the compound interest.
check_circle

Expert Answer

Step 1

The computation of compound amount is as follows:

Hence, the compound amount of loan is $1685.9136....

help_outline

Image Transcriptionclose

Compound amount Amount of loan x(1+r) = S1,200x (1+12 = S1685.9136

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Finance

Other

Related Finance Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: Debbie invests $5,500 in her IRA account each year for 40 years.  If she earns 7% return annually on...

A: We need to use the concept of time value of money to solve the question. According to the concept of...

question_answer

Q: What is the company’s cost of capital? 1. CAPM = rrf + (rm – rrf)B = required rate of return on equi...

A: 1.Risk-Free Rate (rrf) = 3% or 0.03Market Premium (rm – rrf) = 5% or 0.05Beta (B) = 1.2 Computation ...

question_answer

Q: Micheal finds himself ia panic with a tax deadline coming up. Along with his wife they have a income...

A: Given that the combined income is $60000, interest earned is $1200, investment amount in the tax def...

question_answer

Q: 10. The balance on Ramon Felipe's credit card on January 18, his billing date, was $265.87. For the ...

A: Computation of average daily balance, finance charge, and balance due:Hence, a) the average daily ba...

question_answer

Q: Dexter International is expected to pay a dividend next year of $2.10 per share. Dexter has a beta o...

A: Calculation of dividend yield:Answer:Dividend yield is 5.0%Meaning:Dividend yield is shown as a perc...

question_answer

Q: What are some of the cash management strategies used by your organization or by organizations that y...

A: Cash Management:It is a method that helps to collects and manages the cash flow of an organization. ...

question_answer

Q: Consider an all-equity firm that is contemplating going into debt. The market value of equity is cal...

A: The formula to calculate WACC is as follows:

question_answer

Q: The Netflix Corporation's cash flow from operations before interest and taxes was $5.25 milion in th...

A: Calculation of Price per share:The price per share is $9.39.Excel Spreadsheet:

question_answer

Q: You currently have $4,000 in a bank account that pays a nominal rate of 1%, compounded monthly. You ...

A: The interest that is calculated on all the accumulated interest of previous years or months plus ini...