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In: Finance
A farmer is considering borrowing money from a bank. Given the following information: Initial loan amount...
A farmer is considering borrowing money from a bank. Given the following information: Initial loan amount is $52,000. The loan will be fully amortized in 3 years at 10%. Marginal tax rate is 15%. (i) What is the principal payment in the 1st year? a. $15,709.97 b. $13,029.06 c. $13,353.47 d. None of the answers are correct ENTER RESPONSE HERE: (ii) What is the principal payment in the 2nd year? a. $14,835.71 b. $3,530.58 c. $17,280.97 d. None of the answers are correct ENTER RESPONSE HERE:
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Expert Solution
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
As nothing was mentioned excel is used for calculating "PMT". If you need with formula, let me know, will do that also. Thank you.
jeff jeffy answered 10 months agoRelated Solutions
A farmer is considering borrowing money from a bank. Given the following information: Initial loan amount...
A farmer is considering borrowing money from a bank. Given the
following information:
Initial loan amount is $88,000.
The loan will be fully amortized in 3 years at 12%.
Marginal tax rate is 20%.
(i) What is the interest payment in the 1st year?
a.
$12,672.00
b.
$13,200.00
c.
$10,560.00
d. None of the
answers are correct
(ii) What is the principal payment in the 1st
year?
a.
$20,862.97
b.
$20,041.13
c.
$4,400.00
d. $26,078.71...
A farmer is considering borrowing money from a bank. Given the following information: Initial loan amount...
A farmer is considering borrowing money from a bank. Given the
following information: Initial loan amount is $88,000. The loan
will be fully amortized in 3 years at 12%. Marginal tax rate is
20%. (i) What is the interest payment in the 1st year? a.
$12,672.00 b. $13,200.00 c. $10,560.00 d. None of the answers are
correct ENTER RESPONSE HERE: (ii) What is the principal payment in
the 1st year? a. $20,862.97 b. $20,041.13 c. $4,400.00 d.
$26,078.71 ENTER RESPONSE...
A farmer is considering borrowing money from a bank. Given the following information: Initial loan amount...
A farmer is considering borrowing money from a bank. Given the
following information: Initial loan amount is $250,000. The loan
will be fully amortized in 3 years at 14%. Marginal tax rate is
15%. (ii) What is the interest payment in the 1st year? a.
$41,176.47 b. $29,750.00 c. $40,250.00 d. $35,000.00 ENTER RESPONSE
HERE: (iii) What is the interest payment in the 2nd year? a.
$21,100.74 b. $29,205.17 c. $28,548.06 d. $24,824.40 ENTER RESPONSE
HERE: (iii) What is the...
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.
Given the following information: Item Bank A Bank B Loan Amount (1) $860.74 $860.74 Contractual Rate...
Given the following information:
Item
Bank A
Bank B
Loan Amount
(1)
$860.74
$860.74
Contractual Rate
(2)
15.74%
17.40%
Conversion Periods
(3)
4
1
Life of Loan (years)
(4)
4
4
Method of Payment
(5)
Fully Amort.
Fully Amort.
Fee
(6)
No
No
Stock Requirement
(7)
No
No
Calculate the APR at Bank A.
a. 2.73% b. 15.74%
c. 14.07% d. 2.56%
Enter Response Here:
(ii) Calculate the
effective rate at Bank A.
a. 3.11% b. 16.69%
c. 2.59% d. 14.83%
Enter Response Here:
(iii) Calculate the APR at Bank
B.
a. 11.87% b. 2.56%
c. 17.40% d. 14.07%
Enter...
Given the following information: Activity Amount, K Cash from short-term borrowing 800,000 Cash from issuing capital...
Given the following information:
Activity
Amount, K
Cash from short-term borrowing
800,000
Cash from issuing capital stock
2,000,000
Cash from issuing bonds payable
10,000,000
Dividends paid
1,000,000
Payments to settle short-term debts
5,000,000
Cash from sales of plant assets
3,000,000
Loans made to borrowers
500,000
Purchases of marketable securities
6,000,000
Collections on loans
300,000
Purchases of plant assets
10,000,000
Cash paid to suppliers and employees
20,000,000
Cash received from customers
30,000,000
Income taxes paid
1,600,000
Interest and dividends received
500,000...
Solve each of the following three problems, all of which involve borrowing money from a bank...
Solve each of the following three problems, all of which involve
borrowing money from a bank with an APR of 6.5% compounded
annually. Look carefully at how the problems differ from one
another, in spite of appearing similar. In your solutions, say a
few words explaining how you can tell which is the appropriate
formula to apply in each case.
a. Suppose that you borrow $1000 once per year, beginning today,
and ending 10 years from now (so you borrow...
Initial deposit --> university bank ---> loan --> bank #2. --loan--> bank #3---loan --> ($100).
Initial deposit --> university bank
---> loan --> bank #2. --loan--> bank #3---loan -->
($100).
Deposit-->
Deposit--> Deposit-->
a. What volume of loans can the
banking system in the figure support? _____________
b. If the reserve requirement were 45
percent rather than 75 percent, what would the system’s lending
capacity be? ____________
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
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
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