Question
In: Finance
35. Based on the information from Question 33 and 34, calculate the total amount of interests you should pay for the amortized loan in three years.
33. Construct an amortization schedule for a $1,000, 8% annual rate loan with 3 equal payments. The first payment will be made at the end of the1st year. Find the required annual payments: $338.0
34. Based on the information from Question 33, what’s the ending balance of the amortized loan at the end of the third year: $0
35. Based on the information from Question 33 and 34, calculate the total amount of interests you should pay for the amortized loan in three years.
A. $128.8
B. $145.4
C. $150.0
D. $164.1
Solutions
Expert Solution
33. Required annual payments is $388.03 and not $338.00 ( I will give the working at the end of this solution).
34. $0 is correct.
35. Total payment towards loan = $388.03 * 3 = $1,164.10
When you subtract the loan amount from total payment we get the total interest.
Total interest = $1,164.10 - $1,000 = $164.10
So the answer is D. $164.1
.
.
.
Now come back to 33.
I am using present value of annuity formula to find the yearly payment:
Where,
PVA = Present value of annuity
A = Annuity
i = Interest rate in decimal form
n = Number of years
Substituting the values, we get:
.
Amortization table:
| Loan Amortization table | ||||
| Year | Payment | Interest portion | Principal portion | Loan balance |
| 0 | - | - | - | $1,000.00 |
| 1 | $388.03 | $80.00 | $308.03 | $691.97 |
| 2 | $388.03 | $55.36 | $332.68 | $359.29 |
| 3 | $388.03 | $28.74 | $359.29 | $0.00 |
| Total | 1,164.10 | 164.10 | 1,000.00 | - |
Excel formulas and functions used in above table:
jeff jeffy answered 2 years agoRelated Solutions
Given the following information, calculate the balloon payment for a partially amortized mortgage. Loan amount: $84,000,...
Given the following information, calculate the balloon payment
for a partially amortized mortgage. Loan amount: $84,000, Term to
maturity: 7 years, Amortization Term: 30 years, Interest rate:
4.5%, Monthly Payment: $425.62. $9,458 $30,620 $73,102 $84,000
Given the following information, calculate the Effective Borrowing Cost (EBC). Loan amount: $175,000, Term: 30 years,...
Given the following information, calculate the Effective
Borrowing Cost (EBC). Loan amount: $175,000, Term: 30 years,
Interest rate: 7 %, Payment: $1,164.28, Discount points: 1 point,
Origination fee: $3,250. Assume the loan is held until the end of
year 10.
A. 0.6%
B. 3.8%
C. 7.0%
D. 7.4%
please show how to solve on a financial calculator.
Ruby Company follows activity-based budgeting. From the information given below, calculate the total activity cost of...
Ruby Company follows activity-based budgeting. From the
information given below, calculate the total activity cost of the
company. Activity description Activity driver Cost per unit of
driver Amount of driver Processing mail Number of clients $120 $75
Paying bills Number of bills $ 2.5 $10,000 Investigating Number of
new hires $110 $75 Writing reports Number of clients $150 $75 a.
$52,500 b. $52,800 c. $53,500 d. $53,200
Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information
In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows:
2021
2022
2023
Cost incurred during the year
$
2,610,000
$
3,162,000
$
2,230,800
Estimated costs to complete as of year-end
6,390,000
2,028,000
0
Billings during the year
2,100,000
3,672,000
4,228,000...
Question You are the manager. What information should you request from the management accounting department? How...
Question
You are the manager. What information should you request from the
management accounting department? How will this information help
you make a decision to solve this problem? If you use outside
resources, please cite them using APA format.
Details
Managerial Accounting Scenario 1
The manager of a fabric store has noticed a considerable
increase in the amount of defective fabric being scrapped by his
store. Clerks notice the defects (such as irregularities in the
weave or color of fabric)...
You want to withdraw $19883 two years from now. Calculate the amount of end-of-period bi-weekly payments...
You want to withdraw $19883 two years from now. Calculate the
amount of end-of-period bi-weekly payments that you need to make,
if the (nominal) interest rate is 1.5% per year. Assume bi-weekly
compounding.
Based on the information in #1, calculate the value of your stock investment plus the total cash received after 4 years if you had chosen to take the dividends in cash and not participate in the dividend reinvestment plan. Calculate your HPR if you sold t
You bought 1000 shares of Micro, Inc. at 45. The stock paid a
$1.35 annual dividend in the year when you purchased the stock. In
subsequent years, the dividend was increased 6 percent a year. The
stock price stayed at 45 for the first year and then rose 13
percent a year. If you participated in the firm’s dividend
reinvestment plan, calculate the value of your stock investment
after 4 years. Calculate your HPR if you sold the stock at...
Calculate the MIRR of the following project. Your initial investment cost is $180, and you will receive cash inflows of $55, $142, and $35 over the next three years.
Calculate the MIRR of the following project. Your initial investment cost is $180, and you will receive cash inflows of $55, $142, and $35 over the next three years. The discount rate is 13%. Show all of your work. Round to the nearest 0.01%.
The stock will pay a $20 dividends per year, but the first dividend will not be paid until 20 years from today. If you require a return of 8 percent on this stock, how much should you pay?
Valuing Preferred Stock:
I-Eyes.com has a new issue of perferred stock it calls 20/20 preferred. The stock will pay a $20 dividends per year, but the first dividend will not be paid until 20 years from today. If you require a return of 8 percent on this stock, how much should you pay?
Balance Sheet Question: Based on the Balance Sheet you prepared on your scratch paper, what is amount of the Total Stockholders' Equity shown on the Balance Sheet you prepared on your scratch paper?
Balance Sheet Question: Based on the Balance Sheet you prepared on your scratch paper, what is amount of the Total Stockholders' Equity shown on the Balance Sheet you prepared on your scratch paper? Fill in the blank with your calculated number. DO NOT include commas, $ signs, period, decimal points, etc., just enter the raw number. Webcourses will add commas to your answer automatically. For example, if you calculated the answer to be $24,123, you would only input: 24123
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- In the article from Forbes notes that the goal of a leader is not to clone...
- Many people keep time using a 24 hour clock (11 is 11am and 23 is 11pm,...
- UNIX ONLY -- DIFFICULT LAB ASSIGNMENT This is an extremely difficult subject for me. Could you...
- Do you know why your credit card can be refused even though you are profitable?
- The Following Java expression: S/10 * 10 + 10 – S = C Show that this...
- Year Cash Flow 0 −$9,700 1 5,800 2 2,500 3 3,400 &nb
- In a two – story building, an exterior column is to be designed for a service...
ADVERTISEMENT