38) Anika Braun, owner of the Bear’s Den Sports Bar, is considering renovating the bar. She estimates that she will need to borrow $150,000 to cover all expected costs of the renovation. She intends to repay the loan with a series of equal annual payments.
Required:
Calculate the annual payments required for each of the following loans:
39) Calculate the payment required for each of the loans listed below. Assume that all loan payments are made at the end of the period described.
|
Principal
|
Annual
interest rate
|
Term
|
Payments made
|
Amount of each
payment
|
1.
|
$40,000
|
5%
|
5 years
|
annually
|
$
|
2.
|
$40,000
|
8%
|
5 years
|
annually
|
$
|
3.
|
$40,000
|
8%
|
10 years
|
annually
|
$
|
4.
|
$40,000
|
8%
|
10 years
|
semiannually
|
$
|
5.
|
$40,000
|
8%
|
10 years
|
quarterly
|
$
|
40) Calculate the present value of each of the following future amounts:
|
Future amount
|
Time period
|
Interest rate
|
Present value
|
1.
|
$40,000
|
5 years
|
8%
|
$
|
2.
|
$40,000
|
10 years
|
8%
|
$
|
3.
|
$25,000
|
2 years
|
10%
|
$
|
4.
|
$100,000
|
8 years
|
5%
|
$
|
5.
|
$500,000
|
20 years
|
6%
|
$
|
41) Calculate the payment required for each of the loans listed below. Assume that all loan payments are made at the end of the period described.
|
Principal
|
Annual
interest rate
|
Term
|
Payments
made
|
Amount of
each payment
|
1.
|
$50,000
|
7%
|
5 years
|
annually
|
$
|
2.
|
$50,000
|
6%
|
5 years
|
annually
|
$
|
3.
|
$50,000
|
8%
|
10 years
|
annually
|
$
|
4.
|
$50,000
|
8%
|
10 years
|
semiannually
|
$
|
5.
|
$50,000
|
12%
|
2 years
|
monthly
|
$
|
42) Compounded, Inc. wants to borrow $100,000 for 10 years at 7% annual interest. The loan will be repaid in ten equal annual payments at the end of each year. How much will each payment be?
43) Suppose you want to repay $1,000,000 over 10 years and you know the interest rate is 12%. If you are willing to make a payment of the same amount at the end of every
quarter
for 10 years, how much will each payment be?