In: Accounting

# Repay an existing bank loan outstanding. The company has a $200,000 loan outstanding from a local... Repay an existing bank loan outstanding. The company has a$200,000 loan outstanding from a local community bank. The interest rate on the loan is 11.5 percent (fixed). Interest payments on the loan are due at the end of each year and the loan balance matures in full in five years. Repay Loan Investment (Outflow) = $200,000 Discount Rate = 10% Annual Interest On The Loan =$200,000 X 11.5% =$23,000 NPV= ## Solutions ##### Expert Solution Present value of loan outflow = Loan ampount*(present value factor at 10%,5 years)+interest payment*(Present value annuity factor at 10%,5years) loan amount =$200,000

interest amount = $23,000 present value factor at 10%,5 years = 0.62092 present value annuity factor at 10%,5 years = 4.16987 Present value of loan outflow = (200,000*0.62092)+(23000*4.16987) =$220091

##### Your company is considering to take a loan from the local bank. Bank charges a 1.25%...
Your company is considering to take a loan from the local bank. Bank charges a 1.25% interest rate per quarter. Then the rate 1.25*4 =5% is called ____    annual percentage rate discount rate compound interest rate effective annual rate
##### On January 1, 2020, ABC Company borrowed $200,000 from the bank. The loan is a 10-year... On January 1, 2020, ABC Company borrowed$200,000 from the bank. The loan is a 10-year note payable that requires semi-annual payments of $24,000 every June 30 and December 31, beginning June 30, 2020. Assume the loan has a 20% interest rate, compounded semi-annually. Calculate the amount of the note payable at December 31, 2020 that would be classified as a long-term liability. ##### Bianca took out a loan from the bank today for X. She plans to repay this... Bianca took out a loan from the bank today for X. She plans to repay this loan by making payments of 44,283 dollars per month for a certain amount of time. If the interest rate on the loan is 1.35 percent per month, she makes her first payment of 44,283 dollars later today, and she makes her final monthly payment of 44,283 dollars in 4 months, then what is X, the amount of the loan? Jabari owns a pet care... ##### Tim Company borrowed$150,000 from a local bank on January 1, 2019.The loan is a...
Tim Company borrowed $150,000 from a local bank on January 1, 2019. The loan is a 5-year note payable that requires semi-annual payments of$24,000 every June 30 and December 31, beginning June 30, 2019. Assume the loan has a 20% interest rate, compounded semi-annually. Calculate the amount of the note payable at December 31, 2019 that would be classified as a long-term liability.
##### Franz just took out a loan from the bank for 227,674 dollars. He plans to repay...
Franz just took out a loan from the bank for 227,674 dollars. He plans to repay this loan by making a special payment to the bank of 36,888 dollars in 5 months and by also making equal, regular monthly payments of X. If the interest rate on the loan is 1.06 percent per month, he makes his first regular monthly payment later today, and he makes his last regular monthly payment made in 9 months from today, then what is...
##### Omar just took out a loan from the bank for 151,051 dollars. He plans to repay...
Omar just took out a loan from the bank for 151,051 dollars. He plans to repay this loan by making a special payment to the bank of 25,246 dollars in 7 months and by also making equal, regular monthly payments of X. If the interest rate on the loan is 1.15 percent per month, he makes his first regular monthly payment later today, and he makes his last regular monthly payment made in 9 months from today, then what is...
##### You have just borrowed $200,000 to buy a condo. You will repay the loan in equal... You have just borrowed$200,000 to buy a condo. You will repay the loan in equal monthly payments of $2,106.45 over the next 25 years. a-1. What monthly interest rate are you paying on the loan? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Monthly interest rate % a-2. What is the APR? (Do not round intermediate calculations. Enter your answer as a whole percent.) APR% b. What is the effective annual... ##### A woman arranges to repay a$1,000 bank loan in 10 equal annualpayments at a...
A woman arranges to repay a \$1,000 bank loan in 10 equal annual payments at a 10% effective annual interest rate starting in the sixth year.a. What is the amount of annual payment?b. If the woman paid the amount calculated in an on the 5th and 6th year, but failed to pay for the obligations on the 8 th and 9 th year, how much does he need to pay every year in addition to the annual payment to compensate...
##### Assume that you are a Loan Officer at the local bank. Company A wants to get...
Assume that you are a Loan Officer at the local bank. Company A wants to get a long-term loan from your bank.    Company B wants to get a long-term loan from your bank. Company C also wants to get a long-term loan from your bank. The TOTAL DEBT RATIO for Company A is .70 and the TIMES INTEREST EARNED RATIO for Company A is .70 for the year. The TOTAL DEBT RATIO for Company B is .75 and the TIMES...