4. A company owes P 80,000, which includes the interest, to be paid one year from now. To provide for the repayment of this debt, the company deposits P 2,000 at the beginning of the first month, P 4,000 at the beginning of the second month, increasing the deposits in each succeeding month by P 2,000 until the beginning of the eighth month. These amounts earn interest at the rate of 9% compounded monthly. Will the total amount in the fund at the end of 12 months be sufficient to repay the debt? If not, how much more is needed? (Ans. Additional amount= P 28,301.58)

4. A company owes P 80,000, which includes the interest, to be paid one year from now. To provide for the repayment of this debt, the company deposits P 2,000 at the beginning of the first month, P 4,000 at the beginning of the second month, increasing the deposits in each succeeding month by P 2,000 until the beginning of the eighth month. These amounts earn interest at the rate of 9% compounded monthly. Will the total amount in the fund at the end of 12 months be sufficient to repay the debt? If not, how much more is needed? (Ans. Additional amount= P 28,301.58)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 16P

See similar textbooks

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?
A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383
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.
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
. A debt of P56,000, with interest at 5% compounded monthly, will be discharged, interest included, by monthly payments of P500 for as long as necessary, Find: a. the number of regular payments; b. the outstanding principal after 4 years; c. the final or concluding payment.
A company owes Php 80,000 which includes the interest, to be paid one year from now by monthly deposits. The company deposits Php 2,000 at the end of the first month, Php 3,000 for the second month and increasing the deposits in each succeeding month by 50% until the 12th month. If the interest rate is 9% compounded monthly, will the total amount of deposits beenough to repay the debt? If not, how much more is needed?
A debt of $1908 with interest at 6.3% compounded annually is to be repaid by equal payments at the end of each year for 4 years. 1. What is the balance remaining (BAL) after the first payment? 2. What is the principal repaid (PRN) in the first period? 3. What is the interest paid (INT) in the first period?
17. Bremen Company borrows $350,000 to be repaid in equal installments over a period of eight years. The loan payments are semiannual with the first payment due in six months, and interest is at 6%. What is the amount of each payment?
Olfert Inc. is repaying a loan of $52500.00 by making payments of $4700.00 at the end of every six months. If interest is 7.5% compounded semi-annually, the outstanding balance after the first, second, third payment will be respectively: O 49268.75, 47565.08 and 43995.14 O 49768.75, 45015.08 and 42105.48 49768.75, 46935.08 and 43995.14 O48425.12, 45238.21 and 42355.23 Mrs. Robinson made
A debt of $1908 with interest at 6.3% compounded annually is to be repaid by equal payments at the end of each year for 4 years. What is the balance remaining (BAL) after the second payment? What is the principal repaid (PRN) in the second payment? What is the interest paid (INT) in the second payment?
A given account accrues two kinds of deposits for a period of 7 years. One is a leveled deposit of N$ 2100 every month at a rate of 5.5% compounded monthly. The second is a quarterly deposit of N$ 3500 at the same rate of interest. What will be the outstanding balance in the account at the beginning of 7th year? A. N$258,647.93 B. N$268,062.35 C. N$258,674.93 D. N$285,647.93 O E. N$268,206.35
Heathcliff owes $10,000.00 bearing interest at 6% c.m. for 5 years. Six months before the due date, the debt is commuted into two equal payments, one due in 6 months and another due in 18 months. The new interest rate is set at 8% c.q. Determine the payment size.