Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

IMPORTANT: Only need the answers of E,F, and G! The answer was wrong last time, thumbs up given for a good answer! Thank you very

IMPORTANT: Only need the answers of E,F, and G!
The answer was wrong last time, thumbs up given for a good answer!
Thank you very much.
image text in transcribed
image text in transcribed
image text in transcribed
Question 1 of 1 Borrowing to Start a Business Nicole, a budding entrepreneur, was excited that her presentation at her college annual entrepreneurial competition was voted the best by every judge. An angel investor in the audience was very impressed by her business plan and offered to help her start her business by offering her a loan at 12.00% compounded semi-annually. After 4 years, her business had savings of $101,039.00 and she used the entire amount to completely pay off her outstanding debt with the investor. a. What was the loan amount provided to her by the angel investor and what was the accumulated interest over the four-year period? PV = $0.00 I = $0.00 Round to the nearest cent. b. What rate, compounded monthly, would have resulted in the same accumulated debt? 0.00 % Round to two decimal places. c. How long (rounded up to the next month) would it take for her debt to reach $121,000.00 if she does not repay any amount throughout the term? Assume the same interest rate of 12.00% compounded semi-annually throughout this extended period. o years and 0 months Round up to the next month. d. If she had obtained the same loan amount from a local bank, it would have accumulated to $101,039.00 in 44 months instead of four years. What is the interest rate compounded semi-annually charged by the local bank? 0.00 % Round to two decimal places. e. Calculate the loan amount provided to her by the angel investor if the loan had been issued to her at an annually compounding frequency instead of a semi-annually compounding frequency. Compare your answer to (a) and determine what her savings would be. $0.00 Savings = Round to the nearest cent. f. If her contract with the investor required that she settle all dues in two years, how much could she have borrowed initially if she was sure that she could repay $24,000.00 in one year and $45,000.00 at the end of two years? $0.00 Round to the nearest cent. g. What was the size of the loan provided by the investor if she was charged 12.00% compounded semi-annually for the first year and 14.00% compounded annually for the following year(s) and it accumulated to $101,039.00 in four years? $0.00 Round to the nearest cent

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Money Banking And Financial Markets

Authors: Laurence Ball

1st Edition

0716759349, 9780716759348

More Books

Students also viewed these Finance questions

Question

=+ How do some of them single you out when you're the consumer?

Answered: 1 week ago