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ale4655 [162]
3 years ago
11

Amortization.  Loan Consolidated Incorporated​ (LCI) is offering a special​ one-time package to reduce Custom​ Autos' outstandin

g bills to one​ easy-to-handle payment plan. LCI will pay off the current outstanding bills of ​$242 comma 000 for Custom Autos if Custom Autos will make an annual payment to LCI at an interest rtae of 9 ​% over the next 5 years.   a.  What are the annual payments of the​ loan? b.  What is the amortization schedule for this loan if Custom Autos wants to pay off the loan before the loan maturity in 5 ​years? c.  When will the balance be half paid​ off?   d.  What is the total interest expense on the loan over the 5 ​years?
Business
1 answer:
vladimir2022 [97]3 years ago
7 0

Answer:

Please find the complete question in the attached file.

Explanation:

Use PMT for the interest amount computation

PMT(12\%, 55, 232000, 0 , 0) = \$27,894.77

At first, the bulk of an initial premium is paid at the rate of interest, and that only the remainder of the small part is used for  amortization. The very first three years schedule is shown below:

Loan\ \ \ \ \ \ \ \ \ \  Annual\ \ \ \ \ \ \ \ \ \   Interest\ \ \ \ \ \ \ \ \ \   Principal\\\\

1\ \ \ \ \ \ \ \ \$232,000.00\ \ \ \ \ \ \ \ \$27,894.77\ \ \ \ \ \ \ \ \$27,840.00\ \ \ \ \ \ \ \ \$54.77\\\\2\ \ \ \ \ \ \ \ \$231,945.23\ \ \ \ \ \ \ \ \$27,894.77\ \ \ \ \ \ \ \ \$27,833.43\ \ \ \ \ \ \ \ \$61.34\\\\3\ \ \ \ \ \ \ \ \$231,883.89 \ \ \ \ \ \ \ \ \$27,894.77\ \ \ \ \ \ \ \ \$27,826.07\ \ \ \ \ \ \ \ \$68.70\\\\

By the 49th payment, upwards of half of the initial amount borrowed would be the total principal paid. Using the formula CUMPRINC in excel, the entire principal payment is calculated twice.

Total Interest Expense = 27,894.77 \times 55 - 232,000 = \$1,302,212.27

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Answer:

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Japanese society is extremely structured and they plan everything. There incredible economic success is the result of that. Once I was travelling on the same tour bus as a group of Japanese tourists, and their tour guide requested them to give him their schedules since being on vacations meant not following a plan. The tourists got all anxious and nervous because they were going to do something different, which was scary for them.

That day I started to question myself as to why I rarely plan things, and on the next days I really tried to do it, but I failed. One of the reasons I failed was that I was the only one planning what to do, no one else at work was. I felt like Cameron Diaz when she was making plans about where she should be planning on how to have fun. It was really boring, that is the reason why Japanese don't have children or even girlfriends, its easier to plan what to do with a doll.

There is something nice and good about being spontaneous, although sometimes I still feel that I need to plan a little more.

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3 years ago
After much deliberation you decide to pay $8.00 to get one dozen of kk donuts for breakfast this friday instead of spending the
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To learn more on bill and hold arrangement

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