g0. A company must repay the bank a single payment of $20,000 cash in 3 years fo

Question

g0. A company must repay the bank a single payment of $20,000 cash in 3 years for a loan it entered into The loan is at 8% interest compounded annually. The present value factor or 3 years at 8% is 0.7938. The present va e of the loan (rounded) is: A. $15,877 B. $12,400 C. $5,592 D. $9,200 E. $47,630 A company borrowed cash from the bank by signing a 5-year, value of an annuity factor at%for 5 years is 3.9927. Each annual payment equals $75,000 The present value of the note is: 81. 8% installment note. The present A. $56,352.84 B. $93,921,41 C. $375,000 D. $299,452.50 E. $187,842.81

Explanation / Answer

Q80. Answer is A. $ 15877 Explanation: Payment made at thte end of Year-3 20,000 Present value factor for Year-3 0.7938 Loan amount borrowed (20,000*0.7938) 15876 Q81 Answer is D. $ 299,452.50 Explanation: Annual payment made 75,000 Annuity factor for 5 years 3.9927 Loan amount borrowed (75000*3.9927) 299,453 q82. Answer is B. $ 8391.91 Explanation: Loan amount 40,000 Annuity factor f or 6 years 4.7665 Annual payments (40,000/4.7665) 8391.902 Q83. Answer is E. $ 45,297 Explanation: Annual payments 9000 Annuity factor for 7 yeears 5.033 Present value of loan (9000*5.033) 45297

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