Question
In: Finance
The insurance company you work for takes out a loan for $2,500,000. They will pay the...
The insurance company you work for takes out a loan for $2,500,000. They will pay the lender at an annual effective rate of 10% interest at the end of each year and then prepay the $2,500,000 at the end of 7 years. The lender requires the insurance company to establish a sinking fund.
How much should the insurance company deposit into the sinking fund each year if they can earn 7% annual effective rate of interest?
Round your answer to the nearest whole dollar.
The correct answer is 288,883. Please reply with a specific solution.
Solutions
jeff jeffy answered 2 years agoRelated Solutions
The government of Bolivia takes out a loan of fixed size (L) and agrees to pay...
The government of Bolivia takes out a loan of fixed size (L) and
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large banks in New York. The loan is due in one year’s time. If
Bolivia chooses to default, it will lose a fraction c of its income
(Y ) due to trade sanctions and other financial distress. The rest
will be consumed. Otherwise, the country can pay principal and
interest on the...
The government of Bolivia takes out a loan of fixed size (L) and agrees to pay...
The government of Bolivia takes out a loan of fixed size (L) and
agrees to pay r interest on it. The loan is extended by a group of
large banks in New York. The loan is due in one year’s time. If
Bolivia chooses to default, it will lose a fraction c of its income
(Y ) due to trade sanctions and other financial distress. The rest
will be consumed. Otherwise, the country can pay principal and
interest on the...
You take out a loan for 10000. You pay off the loan with monthly payments of...
You take out a loan for 10000. You pay off the loan with monthly
payments of 90 for 10
years.
(a) What is the monthly effective rate? What is the annual
effective rate?
(b) What is the outstanding loan balance immediately after the
7th payment? Calculate
using both the retrospective and prospective formulas.
(c) Assume you miss the 13th and 53rd payments, what will be the
outstanding loan balance after the 71st payment?
actuarial science
You are looking to take out a $47，000 loan to pay for school. The loan would...
You are looking to take out a $47，000 loan to pay for school.
The loan would be a five-year loan. The lender offers you a 7%
interest rate on the loan and also offers to structure it in one of
three ways:
what‘s your ending balance of the first year?
a) As a discount loan
b) As an interest-only loan
c) As an amortized loan.
You are looking to take out a $53 ,000 loan to pay for school. The loan...
You are looking to take out a $53 ,000 loan to pay for school.
The loan would be a five-year loan. The lender offers you a 8 %
interest rate on the loan and also offers to structure it in one of
three ways: a) As a discount loan b) As an interest-only loan
c) As an amortized loan. Rounded to the nearest whole dollar,
what will be your balance at the end of year 1 if you take the...
Show your work. Suppose that John takes a loan of 7000 today and pay 1000 in 3...
Show your work. Suppose that John takes a loan of
7000 today and pay 1000 in 3 years and he takes another loan of
2000 in 4 years. He plans to pay everything in 5 years. If the
interest rate is 12 compounded monthly, what is his payment in 5
years?
If you take out a car loan for $35,000, will pay an annual interest rate of...
If you take out a car loan for $35,000, will pay an annual
interest rate of 4% on the loan, and make monthly payments of
$547.58, how many payments will you need to make? -What are you
solving for? -What is your answer?
a) You took out a one-year loan for $3000 and agreed to pay it in three...
a) You took out a one-year loan for $3000 and agreed to pay it
in three equal installments, one payment at the end of 1 months, a
second payment at the end of 2 months, and a last payment at the
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b) In part (a), suppose that you made three non-equal payments:
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How would you calculate how much an insurance company will pay?: $1,000 deductible, $5,000 out of...
How would you calculate how much an insurance company will pay?:
$1,000 deductible, $5,000 out of pocket cap, 80% coinsurance, and a
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Susana takes out a $1,000 loan. The loan carries a 10% annual interest rate and it...
Susana takes out a $1,000 loan. The loan carries a 10% annual
interest rate and it will be amortized with fixed annual payments
over a five-year period. Construct the amortization schedule for
this loan? What is the fraction of the fixed payment represent the
repayment of principal in year 2? Assume Annual Compounding
Show Formula
Find Annual Payment
Create Amortization Table
Show fraction of the fixed payment represents the repayment of
principal in year 2
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