1. Fenland Co. plans to retire $210 million in bonds in five years, so it wishes to fund a savings account at the beginning of each year during that period for which it expects to earn 12% annually. At the end of the five years, there will be enough money in the account to pay off the bonds. What amount does Fenland need to invest each year? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
2. Present and future value tables of $1 at 11% are presented
below.
PV of $1 | FV of $1 | PVA of $1 | FVA of $1 | |
1 | 0.90090 | 1.11000 | 0.90090 | 1.0000 |
2 | 0.81162 | 1.23210 | 1.71252 | 2.1100 |
3 | 0.73119 | 1.36763 | 2.44371 | 3.3421 |
4 | 0.65873 | 1.51807 | 3.10245 | 4.7097 |
5 | 0.59345 | 1.68506 | 3.69590 | 6.2278 |
6 | 0.53464 | 1.87041 | 4.23054 | 7.9129 |
Titanic Corporation leased executive limousines under terms of $120,000 to be paid at the inception of the lease, and four equal annual payments of $130,000 to each be paid thereafter on the anniversary date of the lease. The interest rate implicit in the lease is 11%. The first year's interest expense would be:( Round your intermediate calculations and final answers to the nearest dollar amount.)
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