Manufacturing company borrows 5 million euros from the bank to fight the consequences of the corona...

Manufacturing company borrows 5 million euros from the bank to fight the consequences of the corona virus. The repayment schedule is based on an annuity. The interest rate is 10% and the loan is paid back with 6 annual payments.

Question:

* What is the loan balance immediately the first loan payment is made?

Solutions

Expert Solution

Calculations-

Note -

Interest = Opening balance *Interest rate

Principal paid = Installment - Interest

Closing balance = Opening balance - Principal paid

Please upvote if the ans is helpful.In case of doubt,do comment.Thanks.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Manufacturing company borrows 4 million euros from the bank to fight the consequences of the corona...

Manufacturing company borrows 4 million euros from the bank to fight the consequences of the corona virus. The repayment schedule is based on an annuity. The interest rate is 8% and the loan is paid back with 4 annual payments. Question: * What is the loan balance immediately the first loan payment is made? (Please present your answers by rounding up to thousands and use thousands as unit of measurement. For example the answer 250920 should be written as 251)

In order to purchase manufacturing equipment, a company borrows $1,118,000 from a bank. The bank charges...

In order to purchase manufacturing equipment, a company borrows $1,118,000 from a bank. The bank charges an interest rate of 3.00% per year, compounded annually. After 3 years the company repays the bank in one single payment. a) How much money is the company required to pay the bank? b) How much of the money the company pays the bank is due to interest charges?

5) If a company borrows money from a bank, the interest paid on this load should...

5) If a company borrows money from a bank, the interest paid on this load should be reported on the statement of cash flows: A. Operating activity B. Investing activity C. Financing activity D. Noncash investing and financing activity E. This is not reported in the statement of cash flows. 6) The appropriate section in the statement of cash flows for reporting the purchase of land in exchange for common stock is: A. Operating activities B. Financing activities C. Investing...

Suppose on January 1, 2017, a company borrows $50,000 from a bank at a 5 percent...

Suppose on January 1, 2017, a company borrows $50,000 from a bank at a 5 percent annual rate, with principal and interest payment due at the end of 2018. On January 1, 2017, it also acquires furniture with a ten-year useful life and no salvage value for $40,000. On June 30, 2018, it sells the furniture for an $2,000 gain. What are the operating, investing, and financing cash flows associated with these transactions in (1) 2017 and (2) 2018?

The All-Star company borrows funds of USD 1,000,000, with an interest of 5% from Bank of...

The All-Star company borrows funds of USD 1,000,000, with an interest of 5% from Bank of America and has been withdrawn on 15 January 2019. The loan has a tenor of 1 year. When withdrawing USD/IDR Rp 14,250,-. Currently available Call Options for USD for 365 days tenor are as follows: Premium 2.5% Strike USD/IDR 16,000, - as of 14 January 2020 If on January 14, 2020, the USD/IDR exchange rate is Rp 15,000,- A. What is the total cost...

He borrows $1.5 million from ABC Bank to start this business. The bank charged him an...

He borrows $1.5 million from ABC Bank to start this business. The bank charged him an add-on rate 0.16% per month and the repayment period is 4 year. How much he has to repay every month?

Hedging Decision. Indiana Company expects to receive 5 million euros in one year from exports. It...

Hedging Decision. Indiana Company expects to receive 5 million euros in one year from exports. It can use any one of the following strategies to deal with the exchange rate risk. Estimate the dollar cash flows received as a result of using the following strategies: unhedged strategy money market hedge option hedge The spot rate of the euro as of today is $1.10. Interest rate parity exists. Indiana Company uses the forward rate as a predictor of the future spot...

Indiana Company expects to receive 5 million euros in one year from exports. It can use...

Indiana Company expects to receive 5 million euros in one year from exports. It can use any one of the following strategies to deal with the exchange rate risk. Estimate the dollar cash flows received as a result of using the following strategies: a) unhedged strategy b)money market hedge c)option hedge The spot rate of the euro as of today is $1.10. Interest rate parity exists. Indiana Company uses the forward rate as a predictor of the future spot rate....

Indiana Company expects to receive 5 million euros in one year from exports. It can use...

Indiana Company expects to receive 5 million euros in one year from exports. It can use any one of the following strategies to deal with the exchange rate risk. Estimate the dollar cash flows received as a result of using the following strategies: unhedged strategy money market hedge option hedge The spot rate of the euro as of today is $1.30. Interest rate parity exists. Indiana Company uses the forward rate as a predictor of the future spot rate. The...

4. Indiana Company expects to receive 5 million euros in one year from exports. It can...

4. Indiana Company expects to receive 5 million euros in one year from exports. It can use any one of the following strategies to deal with the exchange rate risk. Estimate the dollar cash flows received as a result of using the following strategies: a). unhedged strategy b). money market hedge c). option hedge The spot rate of the euro as of today is $1.30. Interest rate parity exists. Indiana Company uses the forward rate as a predictor of the...

Subjects