The following situations should be considered independently. (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.)
1. John Jamison wants to accumulate $68,205 for a down payment on a small business. He will invest $35,000 today in a bank account paying 10% interest compounded annually. Approximately how long will it take John to reach his goal?
2. The Jasmine Tea Company purchased merchandise from a supplier for $37,698. Payment was a noninterest-bearing note requiring Jasmine to make seven annual payments of $8,000 beginning one year from the date of purchase. What is the interest rate implicit in this agreement?
3. Sam Robinson borrowed $19,000 from a friend and promised to pay the loan in 10 equal annual installments beginning one year from the date of the loan. Samâs friend would like to be reimbursed for the time value of money at an 11% annual rate. What is the annual payment Sam must make to pay back his friend?
Required 1
Present Value:
N=
I=
Future Value
Required 2
Present Value:
N=
I=
Future Value
Required 3
table or calculator function
Present Value:
N=
I=
Annual Installment
The following situations should be considered independently. (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.)
1. John Jamison wants to accumulate $68,205 for a down payment on a small business. He will invest $35,000 today in a bank account paying 10% interest compounded annually. Approximately how long will it take John to reach his goal?
2. The Jasmine Tea Company purchased merchandise from a supplier for $37,698. Payment was a noninterest-bearing note requiring Jasmine to make seven annual payments of $8,000 beginning one year from the date of purchase. What is the interest rate implicit in this agreement?
3. Sam Robinson borrowed $19,000 from a friend and promised to pay the loan in 10 equal annual installments beginning one year from the date of the loan. Samâs friend would like to be reimbursed for the time value of money at an 11% annual rate. What is the annual payment Sam must make to pay back his friend?
Required 1
Present Value:
N=
I=
Future Value
Required 2
Present Value:
N=
I=
Future Value
Required 3
table or calculator function
Present Value:
N=
I=
Annual Installment
Related questions
You are the new controller for Moonlight Bay Resorts. Thecompany CFO has asked you to determine the companyâs interestexpense for the year ended December 31, 2016. Your accounting groupprovided you the following information on the company's debt (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 tablesprovided.) |
| 1. | On July 1, 2016, Moonlight Bay issued bonds with a face amountof $1,500,000. The bonds mature in 15 years and interest of 11% ispayable semiannually on June 30 and December 31. The bonds wereissued at a price to yield investors 12%. Moonlight Bay recordsinterest at the effective rate. |
| 2. | At December 31, 2015, Moonlight Bay had a 10% installment notepayable to Third Mercantile Bank with a balance of $620,000. Theannual payment is $120,000, payable each June 30. |
| 3. | On January 1, 2016, Moonlight Bay leased a building under acapital lease calling for four annual lease payments of $45,000beginning January 1, 2016. Moonlight Bayâs incremental borrowingrate on the date of the lease was 10% and the lessorâs implicitrate, which was known by Moonlight Bay, was 9%. |
| Required: |
Calculate interest expense for the year ended December 31,2016. |
