Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Need parts E,F and G Please Borrowing to Start a Business Jeremy, a budding entrepreneur, was excited that his presentation at his college annual entrepreneurial

Need parts E,F and G Please

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Borrowing to Start a Business Jeremy, a budding entrepreneur, was excited that his presentation at his college annual entrepreneurial competition was voted the best by every judge. An angel investor in the audience was very impressed by his business plan and offered to help him start his business by offering him a loan at 10.00% compounded semi-annually. After 4 years, his business had savings of $52,536.00 and he used the entire amount to completely pay off his outstanding debt with the investor. a. What was the Ioan amount provided to him by the angel investor and what was the accumulated interest over the four-year period? PV=I= Round to the nearest cent. b. What rate, compounded monthly, would have resulted in the same accumulated debt? j=% Round to two decimal places. c. How long (rounded up to the next month) would it take for his debt to reach $73,000.00 if he does not repay any amount throughout the term? Assume the same interest rate of 10.00% compounded semi-annually throughout this extended period. years and months Round up to the next month. d. If he had obtained the same loan amount from a local bank, it would have accumulated to $52,536.00 in 44 months instead of four years. What is the interest rate compounded semi-annually charged by the local bank? j= e. Calculate the Ioan amount provided to him by the angel investor if the loan had been issued to him at an annully compounding frequency instead of a semi-annually compounding frequency. Compare your answer to (a) and determine what his savings would be. Savings = Round to the nearest cent. f. If his contract with the investor required that he settle all dues in two years, how much could he have borrowed initially if he was sure that he could repay $22,000.00 in one year and $44,000.00 at the end of two years? g. What was the size of the loan provided by the investor if he was charged 10.00% compounded semi-annually for the first year and 12.00\% compounded annually for the following year(s) and it accumulated to $52,536.00 in four years? 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

Financial Mathematics Derivatives And Structured Products

Authors: Chan

1st Edition

9811336954, 978-9811336959

More Books

Students also viewed these Finance questions

Question

Compare the different types of employee separation actions.

Answered: 1 week ago

Question

Assess alternative dispute resolution methods.

Answered: 1 week ago

Question

Distinguish between intrinsic and extrinsic rewards.

Answered: 1 week ago