Question: Suppose that the loan in Problem 12 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a

Suppose that the loan in Problem 12 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $10,000 with the second scheduled payment. How much interest is saved as a result of the prepayment?
In Problem 12
Valley Produce received $50,000 in vendor financing at 7.8% compounded semiannually for the purchase of harvesting machinery. The contract requires annual payments of $10,000 (except for a smaller final payment).

Step by Step Solution

★★★★★

3.40 Rating (166 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Given PV 50000 PMT 10000 i 782 39 c 21 2 i 2 1 i C 1 1039 2 1 0079521 Payment Interest Princ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

711-B-A-C-I (1602).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Suppose that the loan in Problem 10 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $1000 with the...

Suppose that the loan in Problem 2 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $1500 with the...

Suppose that the loan in Problem 4 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $10,000 with the...

Suppose that the loan in Problem 10 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $1000 with the...

Suppose that the loan in Problem 2 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $1500 with the...

Suppose that the loan in Problem 5 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $5000 with the...

Suppose that the loan in Problem 4 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $10,000 with the...

Suppose that the loan in Problem 5 permits an additional prepayment of principal on any scheduled payment date. Prepare another amortization schedule that reflects a prepayment of $5000 with the...

Valley Produce received $50,000 in vendor financing at 7.8% compounded semiannually for the purchase of harvesting machinery. Equal annual payments of $9,587.89 will repay the debt in seven years,...

There is an old saying that predates the marketing concept by perhaps 100 years: "The customer is King." This is usually interpreted to mean that businesses should remember that the only reason they...

A source of sound is travelling towards a stationary observer. The frequency of sound heard by the observer is three times the original frequency. Velocity of the sound is V m/s .The speed of source...

Risk premium to be used in capital asset pricing model

5. Define DFX. Describe how it relates to SC design. 6. Describe the SC design and evolution approach presented by Charles Fine. 7. Is there one right approach to supply chain design? Justify your...

Fin man Company designated Jill Holland as petty cash custodian and established a petty cash fund of $200. The fund is reimbursed when the cash in the fund is at $15. Petty cash receipts indicate...

Horton Corporation is preparing a bank reconciliation and has identified the following potential reconciling items. For each item, indicate if it is (1) added to balance per bank statement, (2)...

Use the information presented in BE7-15 for Horton Corporation. Prepare any entries necessary to make Hortons accounting records correct and complete.

Problem 14.12 A 10-year maturity bond with par value of $1,000 makes annual coupon payments at a coupon rate of 10%. Find the bond equivalent and effective annual yield to maturity of the bond for...

Aria Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 1 74,000 2 87,000 3 101,000 4 96,000 5 77,000 Production of the implants...