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fgiga [73]
4 years ago
15

. John Jamison wants to accumulate $60,000 for a down payment on a small business. He will invest $30,000 today in a bank accoun

t paying 8% interest compounded annually. Approximately how long will it take John to reach his goal? 2. The Jasmine Tea Company purchased merchandise from a supplier for $28,700. Payment was a noninterest-bearing note requiring Jasmine to make five annual payments of $7,000 beginning one year from the date of purchase. What is the interest rate implicit in this agreement? 3. Sam Robinson borrowed $10,000 from a friend and promised to pay the loan in 10 equal annual installments beginning one year from the date of the loan. Sam's friend would like to be reimbursed for the time value of money at a 9% annual rate. What is the annual payment Sam must make to pay back his friend?
Business
1 answer:
Ray Of Light [21]4 years ago
8 0

Solution:

1. We have to use financial calculator to solve this

put in calculator -    

PV  -30000    

FV  60000    

PMT  0    

I       8%    

Compute N       9    

Therefore It will take 9 years to reach his goal  

2. We have to use financial calculator to solve this  

put in calculator -    

PV  -28700    

FV  0    

PMT 7000    

N  5    

Compute I 7.00%    

The interest rate implicit in this agreement rate =7.00%    

3. We have to use financial calculator to solve this  

put in calculator -    

PV  -10000    

FV  0    

I  9%    

N  10    

compute PMT $1,558.20    

The annual payment Sam must make to pay back his friend = $1,558.20

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