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2. BBB purchased equipment witha cash cost of $512000. The seller has offered to accept $102400 payments at the end of the next seven years.

2. BBB purchased equipment witha cash cost of $512000. The seller has offered to accept $102400 payments at the end of the next seven years. What is the total amount of interest that will BBB pay over the term of the loan?

  1. 921600
  2. 204800
  3. 512000
  4. 716800

3. On the December 1, 2025, Alexandria Comapny sold machinery to Clovers Company. The two companies entered into an installement sales contract at a pedetermined interest rate. The contract required four equal annual payments with the first payment due on 12/01/2025, the date of the sale. What time value of money concept is appropriate for this situation?

  1. future amount of 1 for four periods
  2. future amount of an annuity of 1 for four periods
  3. present value of an ordinary annuity of 1 for four periods
  4. present value of an annuity due of 1 for four periods

4. Bert and Earnest want to begin saving for their child's college education. They estimate that they will need $115000 in twelve years. If they can earn 2% per annum, how much must be deposited at the end of each of the next twelve years to fund the education?

  1. 8574
  2. 9450
  3. 10134
  4. 10874

5. Betty and Earnie want to begin saving for their child's college education. They estimate that they will need $190000 in eighteen years. If they can earn 8% per annum, how much must be deposited at the begining of each of the next eighteen years to fund the education?

  1. 5630
  2. 20273
  3. 5073
  4. 4698

6. Clovers Corporation will receive $38000 on January 1, 2025 and each January 1 for the next five years (2026-2030). What is the present value of the six $38000 receipts, assuming a 10% interest rate?

  1. 165500
  2. 182050
  3. 322512
  4. 293193

6. Today Ali has $1300 to invest, which of the following will provide the highest future value?

  1. 5 years with a simple interest rate of 10%.
  2. 10 years with a simple interest rate of 5%.
  3. 8 years with a compound interest rate of 8%.
  4. 5 years with a compound interest rate of 9%.

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