Question
Determining Lease Liability Applied Inc. signed a 10-year lease for its corporate office space on January 2, 2020. The first annual payment of $80,000 is
Determining Lease Liability Applied Inc. signed a 10-year lease for its corporate office space on January 2, 2020. The first annual payment of $80,000 is due immediately. Assuming an interest rate of 7%, what is the present value of the lease liability? Round answer to the nearest whole dollar. Do not use a negative sign with your answer.
Determining Bond Price
On January 1, 2020, Arrow Inc. issued $200,000, 5% bonds due in 10 years. The bonds pay annual interest at the end of each year equal to 5% of face value. The current market interest rate for bonds with similar risk is 4%. Determine the selling price of the bonds.
- Round answer to the nearest whole dollar.
- Do not use a negative sign with your answer.
Computing the Present Value of an Annuity
In repayment of a loan today, Nicholas agreed to pay a financial institution $5,000 at the end of each month over a 3 year period, beginning one month from today. Assuming the interest rate on the loan is 6.4%, what is todays amount of the loan?
- Round answer to the nearest whole dollar.
- Do not use a negative sign with your answer.
Determining Annual Loan Payment
Americ Inc. borrowed $128,000 on January 1, 2020, with repayment scheduled over a 10-year period, with payments due at the end of each year at an interest rate of 7%. What is Americs annual payment on this loan?
- Round answer to the nearest whole dollar.
- Do not use a negative sign with your answer.
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