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timofeeve [1]
2 years ago
10

John Fare purchased $6,000 worth of equipment by making a $1000 down payment and promising to pay the remainder of the cost in s

emiannual payments over the next 6 years. The interest rate on the debt is 12%, compounded semiannually. Find the following. (Round your answers to the nearest cent.) (a) the size of each payment $ Correct: Your answer is correct. (b) the total amount paid over the life of the loan $ Incorrect: Your answer is incorrect. (c) the total interest paid over the life of the loan
Business
1 answer:
vesna_86 [32]2 years ago
7 0

Answer:

C $ 596.39

total payment          7,156.68

Interest expense     2,156.68

Explanation:

6,000  -  1,000 = 5,000 amount to finance

We will calcualte the cuota of an annuity of 6 years with semianual payment at 12% annual rate.

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV  $5,000.00

time   12 (6 years times 2 payment per year)

rate            0.06 (12% annual we divide by 2 to get semiannual)

5000 \times \frac{1-(1+0.06)^{-12} }{0.06} = C\\

C $ 596.39

The total amount paid will be the cuota times the time of the loan:

Total amount paid

596.39 x 12 = 7,156.68‬

The interest will be the difference between the total amount paid and the principal of the loan

Interest paid

total payment          7,156.68

principal                 (5,000)

Interest expense     2,156.68

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Answer:

D.

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One of the most dramatic changes in connectivity and communications in the past few years has been _______.
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3 years ago
You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangement
Fed [463]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Option 1:

You can have $72,000 per year for the next two years

Option 2:

You can have $61,000 per year for the next two years, along with a $17,000 signing bonus today. The bonus is paid immediately, and the salary is paid in equal amounts at the end of each month.

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To calculate the present value, we need to use the following formula:

PV= FV/(1+i)^n

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FV= PV*(1+i)^n

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