Question
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?
- 921600
- 204800
- 512000
- 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?
- future amount of 1 for four periods
- future amount of an annuity of 1 for four periods
- present value of an ordinary annuity of 1 for four periods
- 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?
- 8574
- 9450
- 10134
- 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?
- 5630
- 20273
- 5073
- 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?
- 165500
- 182050
- 322512
- 293193
6. Today Ali has $1300 to invest, which of the following will provide the highest future value?
- 5 years with a simple interest rate of 10%.
- 10 years with a simple interest rate of 5%.
- 8 years with a compound interest rate of 8%.
- 5 years with a compound interest rate of 9%.
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