Question

You borrow $100,000 today. You will repay the loan with 20 equal annual payments starting in year 3 If the interest rate on the loan is 5% APR, compounded annually, how big is each payment?

Answer #1

for first 3 years there is no payment but interst will be accumulated along with the principal amount

ie. first year = (100000* 5%)+ 100000 = 105000

second year = 105000+ (105000*5%) = 110250

third year = 110250 + (110250* 5%) = 115762.5

**When the repayment starts, the total amount will be
115762.5**

r= 0.05

PV =115762.5

n = 20

P=(0.05* 115762.5)/(1-(1+0.05)^-20

=5788.125 /

ie, **P =
$9289.07**

If you borrow $1,800 and agree to repay the loan in four equal
annual payments at an interest rate of 10%, what will your payment
be? (Do not round intermediate calculations. Round your
answer to 2 decimal places.)
b. What will your payment be if you make the first
payment on the loan immediately instead of at the end of the first
year? (Do not round intermediate calculations. Round your
answer to 2 decimal places.)

a. If you borrow $1,700 and agree to repay the loan in six equal
annual payments at an interest rate of 11%, what will your payment
be? (Do not round intermediate calculations. Round your answer to 2
decimal places.)
b. What will your payment be if you make the
first payment on the loan immediately instead of at the end of the
first year? (Do not round intermediate calculations. Round
your answer to 2 decimal places.)

You want to borrow $44,536. You must repay the loan in 6 years
in equal monthly payments and a single $3,319 payment at the end of
6 years. Interest rate is 3% nominal per year.
What will be the loan balance immediately after the
32th payment?

You are the loan officer of a bank. The ABC Company wants to
borrow $100,000 and repay it with four equal annual payments (first
payment due one year from now). You decide that the ABC Company
should pay 0.10 per year on the loan.
a. What is the annual payment?
b. Complete the following debt amortization table:
Period
Amount owed(beginnig of yr)
Interest
Principal
Amount owed(end of yr)
1
$100,000
2
3
4
c. What would be the annual payment...

You borrow $70,000 today at an interest rate of 5.82 percent.
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in equal monthly payments and a single $2,894 payment at the end of
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Consider a 4-year amortizing loan. You borrow $2,900 initially
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interest rate is 9%, what is the annual payment? (Do not round
intermediate calculations. Round your answer to 2 decimal places.)
b. Prepare an amortization schedule. (Do not round intermediate
calculations. Round your answers to 2 decimal places. Leave no
cells blank - be certain to enter "0" wherever required.)

Jed wants to borrow
$1,000
from you. He is proposing to repay you with three annual
payments of
$347.03
starting one year from
now.
In addition, he will make a final lump-sum payment of
$120
three years from
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What rate of return are you earning on the loan?
What rate of return are you earning on the loan?

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Show work.

You borrow $70,000 and arrange to pay off the loan in five equal
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A.
19.5 percent
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80.5 percent
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