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inessss [21]
3 years ago
12

Sam Robinson borrowed $11,000 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 10% annual rate. What is the annual payment Sam must make to pay back his friend? (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)
Business
1 answer:
Y_Kistochka [10]3 years ago
4 0

Answer:

P = $1790.01

Explanation:

Given data:

Borrowed money = $11,000

Number of installment = 10

Annual rate of interest = 10%

11,000 = P(1.1)^1 + P(1.1)^2 + P(1.1)^3 + P(1.1)^4 + P(1.1)^5 + P(1.1)^6 + P(1.1)^7 + P(1.1)^8 + P(1.1)^9 + P(1.1)^10

\frac{11,000}{17.53} = P

P = $627.45

PV of annuity is given as:

PV of annuity = P*[\frac{(1-(1+r)^{-n})}{ r}]

P - Periodic payment

r - rate per period

n - number of periods

11,000 = P*[\frac{(1-(1+0.1)^{-10})}{0.1}]

P = $1790.01

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2 years ago
what is the role of advertising in increasing and decreasing economic well being, by giving examples from pakistani market, expl
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3 years ago
John's Auto Repair just obtained an interest-only loan of $35,000 with annual payments for 10 years and an interest rate of 8 pe
Nookie1986 [14]

Answer:

$2,800

Explanation:

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Since the loan obtained by John's Auto Repair is Interest Only, it means that the principal of $35,000 remains constant.

Hence, in the 8th year, John is expected to pay only the interest for the period =

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3 years ago
What do we call the board members who are part of a company's senior management team appointed by shareholders to provide the bo
wlad13 [49]

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7 0
3 years ago
The Donaldson Furniture Company produces three types of rocking​ chairs: the​ children's model, the standard​ model, and the exe
lions [1.4K]

Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

We assume that

X = No. of children

Y  = Standard type

Z = Executive type

So,

5x + 4y + 7z = 185.........(1)

3x + 2y + 5z = 115.........(2)

2x + 2y + 4z = 94

x + y + 2z = 47.........(3)

Equation (2) multiply by 2

6x + 4y + 10z = 230

From equation (1) to (2)

5x + 4y + 7z = 185

6x + 4y + 10z = 230

-x + 0 - 3z = -45

x + 3z = 45.......(4)

Equation (3) multiply by 4

4x + 4y + 8z = 188

From equation (1) to (3)

5x + 4y + 7z = 185

4x + 4y + 8z = 188

x + 0 - z = -3

- x + z = 3……(5)

From equation (5) to (4)

x + 3z = 45

-x + z = 3

4z = 48

Executive type = Z = 48 ÷ 4 = 12

Z = 12 in equation (5)

-x + 12 = 3

x = 9 (children type)

x=9, z=12 in equation 1

5x + 4y + 7z = 185

5 × 9 + 4 × y + 7 × 12=185

45 + 4 × y + 84 = 185

4y = 56 ÷ 4

Y= 14(Standard type)

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3 years ago
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