Answered: You borrow $5000 at 10% per year and…

You borrow $5000 at 10% per year and will pay off the loan in 3 equal annual payments starting one year after the loan is made. Which of the following is true for your payment at the end of year 2?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 5Q: If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the...

See similar textbooks

Related questions

Q: $5000 that you have to pay in 7 annual installments of $1100 each, the first one at the end of the…

A: The given problem relates to RATE function in excel. RATE function computes interest rate for no. of…

A: As per the given information: Amount of loan - $164,000 Rate of interest - 8% Period - 11 years To…

Q: You put $1, 000 into a savings account today that offers a 5% APR with semi-annual compounding…

A: Interest rate is the rate that is charged on the money (Principal) lent by the lender to the…

Q: calculate the amount of payments

A: Payments: Payments are the amounts that are used to settle the borrowings from any financial or…

Q: Consider a loan of $2 million that is paid quarterly over a period of 10 years. Calculate the dollar…

A: In case of loan payments a fixed amount is paid in each period. While the amount of each payment…

Q: Assume you borrow $ 60,000 at 12% per year interest and you agree to repay the loan at 11 equal…

A: Loan is an agreement between lender and borrower where lender gives lump-sum money to borrower in…

Q: Suppose that your unsubsidized Stafford loans plus accumulated interest total $ 28000 at the time…

A: Loan amount (L) = $28000 Interest rate (r) = 8.5% per annum = 0.70833% per month n = 10 years = 120…

Q: Suppose that your unsubsidized Stafford loans plus accumulated interest total $ 23000 at the time…

A: Given:

Q: You plan to deposit $900 PER YEAR into an account earning 5.25% interest compounded annually. How…

A: Since you posted multiple questions ,we will solve the second page last question for you. if u want…

Q: a) i) Ali is paying off a loan by making $50 payments at the end of every month for 2 years, at 6%,…

A: Loan is a borrowed amount taken for the purpose of completing the shortage of funds. When an…

Q: You plan to deposit $100 at the end of every quarter (3 months) for 8 years starting at the end 8f…

A: Compound interest is the nothing but an interest on a deposit computed on principal amount and the…

Q: Suppose that you borrow $10,000 from a bank to purchase a car. You agree with the bank to repay the…

A: Given: Particulars Amount Loan $10,000 Interest rate 16% Years 1

Q: The going annual interest rate for a loan with a term of 30 years is 6% compounded monthly. The…

A: Going interest rate is the interest rate that is prevailing in the market for loans or bonds. It is…

Q: You borrow $1,000,000 at 3% compounded semi-annually and will pay it off over bi-weekly (every two…

A: Amount borrowed= $1,000,000 Rate= 3% compounded semi-annually Time (n)= Bi weekly over 25 years

Q: You have a student loan of 25000 with a fixed Apr of 6 % for 15 years what is the monthly payment…

A: Using excel PMT function

Q: John borrows $50,000 at an annual effective rate of 6% and will make payments 3. at the end of each…

A: The balance after the 10th loan payment can be ascertained by computing the future value at the end…

Q: You borrow $1,000,000 at 3% compounded semi-annually and will pay it off over bi- weekly (every two…

A: There are two methods to charge interest on the loan taken. One is the simple interest method and…

Q: You have just deposited $9,500 into an account that promises to pay you an annual interest rate of…

A: GOAL (FV) 27940 INTEREST RATE 6.20% YEARS 8+12=20 PMT 0 PV 9500

Q: Suppose you borrow $70,000 at 5.25% annual interest to be repaid with a fully amortized plan over 14…

A: Annual payment (P) on a loan (PV) of $70,000 at an interest rate ( r ) of 5.25% and for 14 years (n)…

Q: You put $1,000 into a savings account today that offers a 5% APR with semi-annual compounding (i.e.,…

A: Compound the money invested provides the future value of an investment.

Q: You have taken out a loan that requires you to repay $200 per month for 10 years at 12% annual…

A: Given:

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: Determine the amount of the payment required at the end of each quarter to repay a six-year loan of…

A: Time Value of Money :— According to this concept, value of money in present day is more than the…

Q: You borrow $10,000 at 8% for 4 years. The loan is repayable in four equal instalments at year end.…

A: Yearly installment will be calculated by amount of borrowing divided by present value factor of $1…

Q: You put $1,000 into a savings account today that offers a 55% APR with semi-annual compounding…

A: GIVEN, PV = $1000 N = 2 M = 2 (SEMI ANNUAL) R=55%

Q: Tedros borrowed $2 million and planned to repay the loan by making equal month-end payments over a…

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

Q: You deposit $27,000.00 in an account that pays 4% compounded annually and immediately start making…

A: Given:

Q: If you borrow $25,000 from a local finance company and you are required to pay $4,424.50 per year…

A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…

Q: Suppose that your unsubsidized Stafford loans plus accumulated interest total $ 34000 at the time…

A: Loan amount (P) = $34000 Monthly interest rate (r) = 0.00625 (0.075 / 12) Monthly period (n) = 120…

Q: You plan to accumulate R450,000 over a period of 12 years by making equal annual deposits in an…

A: Annuity due is a type of annuity under which payment is deposit at starting of the each period and…

Q: r the

A: The given problem can be solved using PMT function in excel. PMT function computes installment…

Q: You have borrowed $60,000 at an interest rate of10.5%. Equal payments will be made over a…

A: A series of fixed payments that are paid or received at an equal time interval is term as the…

Q: Tedros borrowed $2 million and planned to repay the loan by making equal month-end payments over a…

Q: You are paid £4,000 annually for 6 years, with the first payment due in one year and the last…

A: Annual payment (P) = £4,000 Number of annual payments (n) = 6 Interest rate (r) = 2%

Q: You borrow 10.000 USD for 4 years to be paid with equal installments. The rate is 10% a-what is…

A: Remaining principal after a certain time period denotes the outstanding principal at the end of that…

Q: Suppose that your unsubsidized Stafford loans plus accumulated interest total $ 20000 at the time…

A: Installment is the periodic amount paid by the borrower to the lender in order to pay back the loan…

Q: What is the size of 8 equal annual payments to repay a loan of $1,000? The first payment is due one…

A: Present Value of annuity refers to the present value of all the future payments of and series of…

Q: Assume that you keep RM5,555 in the savings account at Affin Bank with an interest of 15 percent per…

A: Saved amount = RM 5,555 Annual interest rate = 15% Period = 5 Years

Q: what will be your monthly payment?

A: Sum of money borrowed if not paid immediately, then over a period of time as per agreement is…

Q: With an annual effective interest rate of 6%, 500 USD is deposited into an account at the end of…

A: we will be using time value of money concepts and formula for this calcualtion Time value of money…

Q: Suppose that your unsubsidized Stafford loans plus accumulated interest total $ 17000 at the time…

A: Loan and total interest= $17,000 For 10 years- = $17000*12*10 = $2,040,000 Let fixed amount for…

Q: If you put $2,500 in a savings account at the end of each year for 10 years and then allow the…

A: End of year deposits Time Period for deposits = 10 years Annual Amount = 2500 Interest Rate = 12%…

Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

You borrow $5000 at 10% per year and will pay off the loan in 3 equal annual payments starting one year after the loan is made.

Which of the following is true for your payment at the end of year 2?

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 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

If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
Calculating single-payment loan amount due at maturity. Stanley Price plans to borrow 8,000 for five years. The loan will be repaid with a single payment after five years, and the interest on the loan will be computed using the simple interest method at an annual rate of 6 percent. How much will Stanley have to pay in five years? How much will he have to pay at maturity if hes required to make annual interest payments at the end of each 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
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.