Financial Accounting
3rd Edition
ISBN: 9780133791129
Author: Jane L. Reimers
Publisher: Pearson Higher Ed
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Chapter 7A, Problem 3EA
Calculate payments using time value of money concepts. (LO 8). For each of the following, calculate the payment each loan would require. Assume the payments are made at the end of the period in each case. Interest rates are annual rates.
- 1. Principal = $30,000; interest rate = 5%; term = 5 years; payments = annual
- 2. Principal = $30,000; interest rate = 8%; term = 5 years; payments = annual
- 3. Principal = $30,000; interest rate = 8%; term = 10 years; payments = annual
- 4. Principal = $30,000; interest rate = 8%; term = 10 years; payments = semi-annual
- 5. Principal = $30,000; interest rate = 12%; term = 2 years; payments = monthly
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1. Let's assume that a loan of $100,000 with an annual interest rate of 6% over 30 years pays monthly payments of $500.
a. Calculate the accumulation rate
b. Calculate the payment rate .
c. Answer : How will the balance of the principal be at the end of the loan in relation to the original amount of the loan? Less, equal or greater?
Provide calculations.
Prepare the first row of a loan amortization schedule based on the following information. The loan amount is for $17,900 with an annual interest
rate of 09.00%. The loan will be repaid over 22 years with monthly payments.
1. What is the Loan Payment?
2. What portion of this payment is Interest?
3. What portion of this payment is Principal?
4. What is the Loan balance after first monthly payment?
The principal P is borrowed at a simple interest rate R for a period of time T. Find the loans Future Value A or total amount due at the time.
P= 39000 R= 6.5% t= 3 years
Chapter 7A Solutions
Financial Accounting
Ch. 7A - Prob. 1YTCh. 7A - Suppose Action Company issues a 1,000, 10-year,...Ch. 7A - Suppose HPS Company issues a 1,000 face value,...Ch. 7A - Present value. (LO 8). Suppose you want to have...Ch. 7A - Present value. (LO 8). Able Company has offered to...Ch. 7A - Calculate payments using time value of money...Ch. 7A - Calculate payments using time value of money...Ch. 7A - Prob. 5PACh. 7A - Prob. 6PB
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