9) Harry borrows $6,000 from a local bank at 7% annually compounded interest to be repaid in five annual instalments. Calculate the principal paid in the third year? 10) Janice borrows $25,000 from the bank at 15 percent to be repaid in 10 equal annual installments. Calculate the end-of-year payment. 11) The following table presents the Sally's Silly Service Company's net earnings for the past six years. Compute the growth rate in the company's earnings. 12) Marc has purchased a new car for $15,000. He paid $2,500 as down payment and he paid the balance by a loan from his hometown bank. The loan is to be paid on a monthly basis for two years charging 12 percent interest. How much are the monthly payments? 13) You have been given the opportunity to earn $20,000 five years from now if you invest $9,524 today. What will be the rate of return to your investment? 14) Ten years ago, Tom purchased a painting for $300. The painting is now worth $1,020. Tom could have deposited $300 in a savings account paying 12 percent interest compounded annually. Which of these two options would have provided Tom with a higher return? 15) Herbert has opened a retirement fund account which pays 7 percent interest and requires $5,000 annual deposits. Herbert will retire in 15 years and expects 10 years of retirement life. What is the maximum annual retirement benefit Herbert can get during his retirement years? 16) Brian borrows $5,000 from a bank at 8 percent annually compounded interest to be repaid in five annual installments. Calculate the principal paid in the third year. 17) Silver Mining, Inc. has $500,000 of earnings before interest and toxes at the year end. Interest expenses for the year were $10,000. The firm expects to distribute $100,000 in dividends. Calculate the eamings after taxes for the firm assuming a 21 percent tax on ordinary income. 18) In a recent year Walmart reported total asset turnover of 2.44 whereas Target reported total asset turnover of 1.84. One interpretation of this is that Walmart managed its assets more efficiently than did Target. Can you think of another reason that might explain the difference in tumover ratios that does not imply that Target managers are performing poorly relative to their peers at Walmart? 6 reflective thinking) 9) Harry borrows $6,000 from a local bank at 7% annually compounded interest to be repaid in five annual instalments. Calculate the principal paid in the third year? 10) Janice borrows $25,000 from the bank at 15 percent to be repaid in 10 equal annual installments. Calculate the end-of-year payment. 11) The following table presents the Sally's Silly Service Company's net earnings for the past six years. Compute the growth rate in the company's earnings. 12) Marc has purchased a new car for $15,000. He paid $2,500 as down payment and he paid the balance by a loan from his hometown bank. The loan is to be paid on a monthly basis for two years charging 12 percent interest. How much are the monthly payments? 13) You have been given the opportunity to earn $20,000 five years from now if you invest $9,524 today. What will be the rate of return to your investment? 14) Ten years ago, Tom purchased a painting for $300. The painting is now worth $1,020. Tom could have deposited $300 in a savings account paying 12 percent interest compounded annually. Which of these two options would have provided Tom with a higher return? 15) Herbert has opened a retirement fund account which pays 7 percent interest and requires $5,000 annual deposits. Herbert will retire in 15 years and expects 10 years of retirement life. What is the maximum annual retirement benefit Herbert can get during his retirement years? 16) Brian borrows $5,000 from a bank at 8 percent annually compounded interest to be repaid in five annual installments. Calculate the principal paid in the third year. 17) Silver Mining, Inc. has $500,000 of earnings before interest and toxes at the year end. Interest expenses for the year were $10,000. The firm expects to distribute $100,000 in dividends. Calculate the eamings after taxes for the firm assuming a 21 percent tax on ordinary income. 18) In a recent year Walmart reported total asset turnover of 2.44 whereas Target reported total asset turnover of 1.84. One interpretation of this is that Walmart managed its assets more efficiently than did Target. Can you think of another reason that might explain the difference in tumover ratios that does not imply that Target managers are performing poorly relative to their peers at Walmart? 6 reflective thinking)