Sampson Company just purchased a piece of equipment with a value of $53,300.
Two Situations
The following situations involve the application of the time value of money concepts.
1. Sampson Company just purchased a piece of equipment with a value of $53,300. Sampson
financed this purchase with a loan from the bank and must make annual loan payments of
$13,000 at the end of each year for the next five years. Interest is compounded annually on the
loan. What is the interest rate on the bank loan?
2. Simon Company needs to accumulate $200,000 to repay bonds due in six years. Simon estimates
it can save $13,300 at the end of each semiannual period at a local bank offering an
annual interest rate of 8% compounded semiannually. Will Simon have enough money saved
at the end of six years to repay the bonds?
Answers
Status NEW
Posted 06 Jun 2017 05:06 PM
My Price 6.00
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Attachments
file 1496770979-1989895_1_636323078995546810_Present-and-Future-value.xlsx preview (259 words )
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