Homework 517 no.2 Q1- A bank gives you a $10,000 short-term loan that is to be paid back at the end of one year. if the interest rate on this loan is 8%, compounded daily, how much will your payment...

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Answered Same DayApr 15, 2021

Answer To: Homework 517 no.2 Q1- A bank gives you a $10,000 short-term loan that is to be paid back at the end...

Sumit answered on Apr 16 2021
159 Votes
1
    Initial Investment    $ 10,000.00
    Interest Rate     8%
    Time     1
    Ending Amount    $ 10,832.78
    H
ence at the end of year the ending amount will be $10,832.78.
2 & 3
    2
    Option 1: In case of Lump Sum payment the PV of the amount of payment is $80,000.
    Option 2:
    Annual Payment    $ 10,000.00
    Interest Rate    5%
    Number of Payments    10
    PVIFA (5%,9 Years)    7.11
    Present Value    $ 81,078.22
    The PV of Payment is $81,078.22
    Option 3:
    Annual Payment    $ 800.00
    Monthly Interest Rate    0.42%
    Number of Payments    119
    PVIFA (0.42%,119...
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