To pay off a loan of P1M, it is required that quarterly payments that increase by P1000.00 be made for 4 years, with the first payment starting three months from now. Determine the amount of the first payment if the interest is 4% compounded quarterly. (Show the cashflow diagram)

To pay off a loan of P1M, it is required that quarterly payments that increase by P1000.00 be made for 4 years, with the first payment starting three months from now. Determine the amount of the first payment if the interest is 4% compounded quarterly. (Show the cashflow diagram)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 31P

See similar textbooks

Related questions

Q: A cash loan is to be repaid by paying $13,500 at the beginning of every month for 3 years. If…

A: Here, Monthly payment = $13,500 Number of years = 3 years Interest rate = 12% Payment at the…

Q: A loan was to be amortized by a 5 end-of-year payments forming an ascending arithmetic progression.…

A: Here, First Payment is P 10,000 Increase in Payment is P1,000 Interest Rate is 10% Time Period of…

Q: The cost of the book is P1,000,000 which will amortized for 3 years monthly but he will start paying…

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

Q: An interest-only ARM is made for $200,000 for 30 years. The start rate is 5 percent and the borrower…

A: a) Computation:

Q: A loan of $14,800 is to be amortized with quarterly payments over 7 years. If the interest on the…

A: Installment is the amount of periodic payments a borrower makes to its lender in order to pay back…

Q: An initial deposit of $8500 is made into an account now, and a second deposit of $16000 is made into…

A: The future value of any deposits is the compounded value of the deposits made in the specified time…

Q: An ARM for $100,000 is made at a time when the expected start rate is 5 percent. The loan will be…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: Set up an amortization schedule for a Rs 100,000 loan to be repaid in equal installments at the end…

A: in this we have to calculate present value FACTOR and find out equal annual payment.

Q: What is the quarterly payment on a loan of $22,000 for 5 years at i= 8% per year, compounded…

A: Mortgage/ Borrowings: Borrowings are the loan which is taken by the individual to meet its…

Q: How much interest is payable each year on a loan of P2,000 if the interest rate is 10% simple…

A: Interest means the extra amount which we received because of investment made and will be paid in…

Q: Hamilton wants to accumulate ₺ 24.000 at the end of 4 years. It starts quarterly payments in a bank…

A: Amount at the end of 4 years = 24000 Total Terms(n) = 4*4 = 16 quarters Anbuak rate =6% Quarterly…

Q: A loan of $245,000 is to be repaid in equal quarterly payments over a period of 6 years. If the…

A: Loan = 245,000 Time Period (N) = 6 years i.e. 24 quarters Number of compounding periods = 4 Interest…

Q: Suppose a borrower makes a $100,000 loan with annual payments at a 10 percent rate and a 10-year…

A: Annuity: An annuity is the series of payments which is received or paid for a fixed period of…

Q: A loan of P30,000 is to be repaid monthly for 5 years that will start at the end of 4 years. If…

A: Present value of deferred annutiy Present value of deferred annuity refers to the annuity which…

Q: A loan of £4,000 is to be repaid over 5 years by a level annuity payable monthly in arrears. The…

A: To Find: Monthly payment Capital repaid and interest paid in first and lst month Loan repaid after…

Q: uppose that one has a bank loan for P15,584.48, which is to be repaid in equal end-of-month…

A: In this we need to calculate present value factor and from that you will get monthly payment.

Q: A consumer loan of P80,000 is obtained that is due 3 months from now. If interest rate is 8%…

A: The borrower is required to pay the lender the initial sum borrowed and the interest on the loan.…

Q: find i (the rate per period) and n (the number of periods) for each loan at the given annual rate.…

A: Calculation of Number of periods and monthly interest rate: Answer: Number of periods is 48 monthly…

Q: Ferris Bueller has borrowed from the Ferrari Bank at a rate of 7% and will repay the laon with…

A: The current worth of the cash flows or an asset after discounting is termed as the present value.

Q: A basic ARM is made for $200,000 at an initial interest rate of 6 percent for 30 years with an…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: A 200,000 dollar loan is taken out. Interest is 6 percent nominal, converted monthly. The loan is to…

A: we will only answer the first three subparts . For the remaining subparts, please resubmit the…

Q: A loan of 10,000 is to be repaid during 5 years with equal monthly payments of p. The interest rate…

A: In this we have to calculate present value of both option.

Q: For a repayment schedule that starts at end of year (EOY) four at $Z and proceeds for years 4…

A: Given: Principal = $10000 Int Rate i=7% Tenure is 10-4 = 6 YrsPayment starts at end of 4 yrs.…

Q: A debt of RM600 due in three years and RM800 due in four years is to be repaid by a single payment…

A: The figure is shown below for considering the time period:

Q: Loans of $1600.00, $8300.00, and $12,100.00 are due now, in four years, and in seven years…

A: Loan due now = $ 1600 Loan due in 4 years = $ 8300 Loan due in 7 years = $ 12,100 Annual interest…

Q: A loan of $4000 at 7.5% compounded monthly requires three payments of $1000 at 6, 12, and 18 months…

A: Compound interest means the interest on the principal plus the accumulated interest on the previous…

Q: what was the corresponding interest rate if it compounded quarterly?

A: Interest Rate: It is the rate for computing either the present value of an amount or the future…

Q: A loan of P8,000 will be amortized by payments at the end of each quarter for 8 years and 9 months.…

A: 1. Calculate the amount of periodic payments by using the EXCEL PMT formula. Note that there are 35…

Q: A loan is to be repaid quarterly for 5 years that will start at the end of 2 years. If interest rate…

A: Given Information: Quarterly payment = 10,000 Annual interest rate = 6% Number of years payment made…

Q: A loan is to be repaid after a term of 5 years. If the principal amount is at P215,000 and the total…

A: The interest rate on the loan: The interest paid on a loan taken is the cost of the money taken as a…

Q: The purchase of a car requires a $25,000 loan to be repaid in monthly installments for 4 years at 9%…

A: Given information: Loan amount is $25,000 Interest rate is 9% Number of years is 4

Q: A loan is to be repaid quarterly for 5 years that will start at the end of 2 years. If interest rate…

A: The Loan amount will be equal to the present value of payments today. Effective quarterly interest…

Q: A cash loan is to be reapid by paying 13,500 php quarterly for 3 years starting the ened of 4 years.…

A: Here, Quarterly Payment is 13,500 Php Payment started at the end of 4 years for 3 years Interest…

Q: A loan is to be repaid quarterly for 10 years that will start at the end of 3 years. If the interest…

A: Given information: Interest rate : 3% converted quarterly Time period : 10 years Quarterly payment :…

Q: A loan is to be repaid quarterly for 14 years that will start at the end of 4 years. If the interest…

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: A loan taken from Riyadh Bank; needs to be paid off, in N years. If the loan is equal to 40…

A: Let the identical payments be x. so the loan value will be 40x. It is given that the interest rate…

Q: I. Hamilton wants to accumulate ₺30000 at the end of 4 years. It starts quarterly payments in a bank…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: If P dollars is borrowed at a rate or r per year to be paid back in t years, the monthly payment…

A: The amount borrowed as a loan needs to be repaid back to the lender along with the interest.…

Q: 1.A cash loan is to be reapid by paying 13,500 php quarterly for 3 years starting the ened of 4…

A: 1) Quarterly payment (Q) = Php 13500 n = 3 years = 12 quarters First payment starts at the end of 4…

Q: If you make quarterly deposits for 3 years into an account that compounds interest at 1% per…

A: The formula of future value of an annuity: FV =A × (1+r)n-1r where A = Annuity amount FV =…

Q: A loan of $27900 is repaid by payments of $675 at the end of every quarter. Interest is 4%…

A: Given: Particulars Amount Loan(PV) $27,900 Payment(PMT) $675 Quarters 4 Interest rate 4%

Q: Regular equal amounts of R1200 are deposited into a savings account every three months for six…

A: INTRODUCTION Bank provides interest on the deposits which are deposited by individuals. This…

Q: For an interest rate of 12% compounded annually, determine the following: (a) How much can be lent…

A: Present value is calculated by discounting the future cash flow at the given discount rate. While,…

Q: A cash loan is to be repaid by paying P13,500 quarterly for 3 years starting at the end of 4 years.…

A: This problem is related to deferred annuity where annuities are deferred. hence there are no payment…

Q: An ARM for $100,000 is made at a time when the expected start rate is 5 percent. The loan will be…

A: Note: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts…

Q: A loan of $8000 will be discharged by a cash payment of $3200 now; $1800 at the end of 4 years; $600…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: A loan is to be repaid quarterly for 10 years that will start at the end of 4 years. If the interest…

A: A loan is a sort of debt that is taken on by an individual or another institution. The lender, which…

Q: A debt of $ 900 is repaid by making payments of $50 at the end of every 6 months. If interest is 3%…

A: The amount of loan is equal to the present value of installment discounted at the required rate of…

Question

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

Step 2

Step 3

Step 4

Step by step

Solved in 4 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?
You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity