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kkurt [141]
2 years ago
9

A bank is negotiating a loan. The loan can either be paid off as a lump sum of $100,000 at the end of five years, or as equal an

nual payments at the end of each of the next five years. If the interest rate on the loan is 10%, what annual payments should be made so that both forms of payment are equivalent
Business
1 answer:
Elina [12.6K]2 years ago
4 0

Answer:

$16,379.75

Explanation:

Calculation for the annual payments that should be made

Using financial calculator to find the PMT

FV = $100,000

Interest rate = 10%

N= 5 years

PMT?

Hence,

PMT = $16,379.75

Therefore the annual payments that should be made so that both forms of payment are equivalent will be $16,379.75

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adoni [48]

Solution:

In years      Best estimate of return            Working note

5                   12.36%              ((5-1)/(40-1)*0.1024)+((40-5)/(40-1)*0.126)

10                   12.06%             ((10-1)/(40-1)*0.1024)+((40-10)/(40-1)*0.126)

20                    11.45%               ((20-1)/(40-1)*0.1024)+((40-20)/(40-1)*0.126)

The formula for the return on assets is calculated by dividing the net income by the total average assets. The profit margin and total asset sales can also be represented as a consequence of this ratio. For the calculation of the total asset return, either formula may be used.

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3 years ago
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Leni [432]

What is Net Asset Value?

Net asset value is the value of an entity's assets less the value of its liabilities, which is frequently used in relation to open-end or mutual funds because shares of such funds registered with the Securities and Exchange Commission are redeemed at net asset value.

Main Content

$11.69

offering price= NAV / (1-load)

12.30=NAV / (1-0.05)

12.30=NAV / (0.95)

12.30 x 0.95 = NAV

NAV= 11.69

To learn more about Net Asset Value

brainly.com/question/28075110

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1 year ago
The disadvantage of owning a mutual fund that invests in common stocks is the risk of loss of ___.
Ludmilka [50]

Answer:

"Principal" Since the value of common stock could decline to zero, investors do carry the risk of losing their entire principal. That risk is greatly reduced when investing in bonds, because if you hold a bond to its maturity date, you will at least get back the par value ($1000) of the bond.

Hope this helps :) -Mark Brainiest Please :)

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2 years ago
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Answer:

C) Both I and II

Explanation:

A partner's tax basis increases as partnership income and gain is allocated to the partner, including the partner's share of tax-exempt income like municipal bonds. The partner must also report a gain on his/her distributive share of partnership items like property, machinery, vehicles or merchandise distribution.

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