Joan Messineo borrowed $15,000 at a 14% annual rate of interest to be repaid over 3 years.
Question:
Joan Messineo borrowed $15,000 at a 14% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual, end-of-year payments.
a. Calculate the annual, end-of-year loan payment.
b. Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan payments.
c. Explain why the interest portion of each payment declines with the passage of time.
Step by Step Answer:
a N 3 I 14 PV 15000 Solve for PMT 646097 b End of Year Loan Payment Beginningof Year Principal Paym...View the full answer
Principles Of Managerial Finance
ISBN: 978-0136119463
13th Edition
Authors: Lawrence J. Gitman, Chad J. Zutter
Related Video
An amortization schedule (sometimes called an amortization table) is a table detailing each periodic payment on an amortizing loan. Each calculation done by the calculator will also come with an annual and monthly amortization schedule above. Each repayment for an amortized loan will contain both an interest payment and payment towards the principal balance, which varies for each pay period. An amortization schedule helps indicate the specific amount that will be paid towards each, along with the interest and principal paid to date, and the remaining principal balance after each pay period
Students also viewed these Finance questions
-
Messineo LLC borrowed $15,000 at a 14% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal annual end of year payments. As the CFO of Messineo, LLC you must...
-
At what nominal annual rate of interest will money double itself in 6 years and 9 months if compounded quarterly?
-
At what nominal annual rate of interest compounded semi-annually will a $135 000 mortgages are amortized by monthly payments of $1023.12 over 15 years?
-
The following is information for a perfectly price discriminating monopolist. Demand: P = 65 0.02Q Marginal revenue = P = 65 0.04Q Marginal cost = ATC = 4 Calculate the producer surplus for the...
-
How is the cost of goods sold calculated and recorded in a periodic inventory system? In a perpetual inventory system?
-
For the beam illustrated in the figure, find the locations and magnitudes of the maximum tensile bending stress due to M and the maximum shear stress due toV. w = 6 kN/mm 0 100 mm A 200 mm B 50 mm dia
-
Describe two conflicts of interest that occur in universal banks.
-
Ferdon Watches, Inc., makes four models of watches, Gag-Gift, Commuter, Sport, and Retirement. Ferdon manufactures the watches in four departments: Assembly, Polishing, Special Finishing, and...
-
The following are the summarised financial statements of APX Ltd for the past two years: Income statement for the year ended 30 November Sales revenue Year 4 Year 5 000 000 000 000 4,940 6,850 Less...
-
Figure shows a uniform beam subject to a linearly increasing distributed load. The equation for the resulting elastic curve is w. (-X* + 21X - L*X) 120 EIL Based on the above equation determine the...
-
Determine the equal, annual, end-of-year payment required each year over the life of the loans shown in the following table to repay them fully during the stated term of theloan. Loan Principal...
-
Liz Rogers just closed a $10,000 business loan that is to be repaid in three equal, annual, end-of-year payments. The interest rate on the loan is 13%. As part of her firms detailed financial...
-
If jPhone, Inc., has an equity multiplier of 1.65, total asset turnover of 1.8, and a profit margin of 6 percent, what is its ROE?
-
Each business day, on average, a company writes checks totaling $37,500 to pay its suppliers. The usual clearing time for the checks is six days. Meanwhile, the company is receiving payments from its...
-
Choose one type of disability management provider (third-party insurance, employer-based, WCB, unionized employer-based). Describe the providers role and the benefits and challenges associated with...
-
James has been in his management position for many years and is comfortable there. Recently, the CEO has been applying pressure on James to get his department to become more computer literate,...
-
The following partial financial Information (in thousands of dollars) is available for Thole, Incorporated: Corporate overhead costs at Thole are allocated to divisions based on relative sales....
-
A business purchases a new form of consumer relation management technology for $380,000. Because of this purchase, the company earns an extra $50,000 annually. A) Find the ROMI for the first year. B)...
-
Calculate the total charge on the cylinder \[ x^{2}+y^{2}=R^{2}, \quad 0 \leq z \leq H \] if the charge density in cylindrical coordinates is \(\delta(\theta, z)=K z^{2} \cos ^{2} \theta\), where...
-
If a process has a six-sigma capability, what is the process capability index? a. 1 b. 2 c. 6 d. 12
-
What is a mission statement?
-
Tasty Bakery Corporation is evaluating the acquisition of a bakery machine that costs $72,000 and requires $3,000 in installation costs. If the corporation depreciates the machine under MACRS, using...
-
Tasty Bakery Corporation is evaluating the acquisition of a bakery machine that costs $72,000 and requires $3,000 in installation costs. If the corporation depreciates the machine under MACRS, using...
-
Stable Nuclear Plant Corporation has estimated the cash flows over the 5-year lives for two projects, A and B. These cash flows are summarized in the table below. a. If project A were actually a...
-
Mr Andrian is the CEO of Cleopetra Sdn Bhd ( CSB ) , a company that manufactures cosmetic product lines. Last month, Mr Andrian met with an old friend, who is a plastic surgeon. They discussed the...
-
6. Explain how sum adds the values in the two-dimensional array emissions. int sum( int a[], int n); main() { int emissions [ 10 ][ 5 ], total; total=sum( (int* ) emissions, 50 ); } int sum( int a[...
-
Consider the circuit alongside, implementing a function F(X, Y, Z) on three variables. (a) (7 points) Give the truth table for the function. Include the intermediate outputs A, B, C, D and E. Then...
Study smarter with the SolutionInn App