Question

In: Accounting

To finance his small business, Sahithi borrowed $15,000 eight months ago and an additional $4,200 three...

To finance his small business, Sahithi borrowed $15,000 eight months ago and an additional $4,200 three months ago. If the loans carry interest at 4.25%, what single payment can Sahithi make five months from now to fully repay the debt? (Do not round intermediate values. Round your answer to 2 decimal places.)

please i need the answers to these questions as quick as possible

Solutions

Expert Solution

We have to calculate Final value of both the borrowed amounts i.e principal + Interest.

So for borrowed amount of $15000

Sahithi had taken loan eight months ago .So till today Interest for 8 months would have been accrued on this amount

Interest amount for 8 months will be $15000 * 4.25% * 8/12 = $425. So today's value of loan is $15000 + $425 = $15425

Now we Sahithi have to repay this loan 5 months from today . So we have to add 5 months interest to today's amount .

It will be $15000 * 4.25% * 5/12 = $265.63

So Amount Sahithi have to pay after 5 months for 1st loan will be $15425 + $265.63 =$15690.63

Similarly for 2nd loan amount of $4200

Sahithi had taken loan three months ago .So till today Interest for 3 months would have been accrued on this amount.

So interest for 3 months will be $4200 * 4.25 % * 3/12 = $44.63. So today's value of this loan is $4200 + $44.63 = $4244.63

Now Sahithi have to repay this loan 5 months from today . So we have to add 5 months interest to today's amount .

It will be $4200 * 4.25% * 5/12 = $74.38

So Amount Sahithi have to pay after 5 months for the 2nd loan = $4244.63 + $74.38 = $4319.01

So one single payment Sahithi can made after five months will be $15690.63 + $4319.01 = $20009.64


Related Solutions

To finance the purchase a new piece of equipment for his business Allan borrowed money from...
To finance the purchase a new piece of equipment for his business Allan borrowed money from his bank paying 5% interest. Before he has paid off the loan he sells the business and disposes of the equipment. There is insufficient sales proceeds to completely pay off the loan and he still has to pay the interest on the unpaid balance. He cannot claim the interest payments a deduction because his business has ceased. True False
(A) Mr. Obenten is an owner-manager of a small business, which started some few months ago....
(A) Mr. Obenten is an owner-manager of a small business, which started some few months ago. He is contemplating on how he can plan and sustain his business growth. As a business growth consultant, discuss the three (3) things he needs to do in preparing for his business growth.                                                            
Five years ago you borrowed $100,000 to finance the purchase of a $120,000 house. The interest...
Five years ago you borrowed $100,000 to finance the purchase of a $120,000 house. The interest rate on the old mortgage is 10%. Payment terms are being made monthly to amortize the loan over 30 years. You have found another lender who will refinance the current outstanding loan balance at 8% with monthly payments for 30 years. The new lender will charge two discount points on the loan. Other refinancing costs will equal $3,000. There are no prepayment penalties associated...
Five years ago you borrowed $100,000 to finance the purchase of a $120,000 home. The interest...
Five years ago you borrowed $100,000 to finance the purchase of a $120,000 home. The interest rate on the old mortgage loan is 8 percent. Payments are being made monthly to amortize the loan over 30 years. You have found another lender who will refinance the current outstanding loan balance at 5.5 percent with monthly payments for 30 years. The new lender will charge two discount points on the loan. Other refinancing costs will equal $3,500. There are no prepayment...
The treasurer of a small bank has borrowed funds for 3 months at an interest rate...
The treasurer of a small bank has borrowed funds for 3 months at an interest rate of 6.73% and has lent funds for 6 months at 7.87%. a. Represent the exposure on cash flow diagrams. b. To cover his exposure created by the mismatch of maturities, the dealer signs a forward loan. Calculate this treasurer’s break - even forward rate on interest, assuming no other costs. c. Assume that instead, the treasurer decides to wait 3 months and take a...
Joan borrowed ​$15,000.00 to buy a car. She repaid ​$4000.00 four months later and ​$6800.00 eight...
Joan borrowed ​$15,000.00 to buy a car. She repaid ​$4000.00 four months later and ​$6800.00 eight months later. After twelve​ months, she borrowed an additional ​$4800.00​, and repaid ​$4400.00 after 19 months. She paid the entire​ balance, including the​ interest, after 24 months. Interest was 6​% compounded monthly for the first year and 5.5​% compounded monthly for the remaining time. What was the size of the final​ payment?
$1,000 was borrowed 3 months ago at 1% per month. Calculate how much will be owed...
$1,000 was borrowed 3 months ago at 1% per month. Calculate how much will be owed at the end of next month. A.) Write a shorthand formula then calculate the value that is owed at the end of next month.
Exactly, eight years ago, Milfred, Inc. issued some $15,000 par value bonds. When issued, the bonds...
Exactly, eight years ago, Milfred, Inc. issued some $15,000 par value bonds. When issued, the bonds had a life of 30 years, paid coupon interest semiannually, and sold at par value. Today, the bonds sell for a price equal to 92 percent of par value (i.e., 92% of $15,000) and the yield to maturity on these bonds is 7.1%. What is the coupon rate of these bonds?
Below is data from a brokerage account Joyce opened eight (8) months ago. The first column...
Below is data from a brokerage account Joyce opened eight (8) months ago. The first column shows the ticker symbols for stocks she has purchased. 1. Solve for the missing values to be sure you know where the numbers come from. Given the info below, what was the previous closing price for SINA? 2. Let’s assume Joyce bought all of these stocks exactly nine months ago. If Costco declares and pays a dividend of $2.45 per share in that period,...
Eight months ago, you sold short 1,000 shares of ABC Company at $30 per share. The...
Eight months ago, you sold short 1,000 shares of ABC Company at $30 per share. The initial margin requirement is 50% and maintenance margin is 30%. Ignoring borrowing cost of the shares, a) calculate the price level that you receive margin call. b) calculate the (i) holding period percentage return and (ii) annual percentage return (APR) of your margin position if you close the margin position at $28 today, immediately after dividend of $1 per share was paid by the...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT