### What percentage of the payment represents principal payment

Assignment Help Financial Management
##### Reference no: EM131448551

a) Set up an amortization schedule for a \$12,000 loan to be repaid in equal instalments at the end of each of the next 3 years. The interest rate is 3 percent, compounded annually.

b) What percentage of the payment represents interest payment and what percentage of the payment represents principal payment for each of the 3 years? Why do these percentages change over time?

### Previous Q& A

#### Potential impact decision would have on firm profitability

Discuss the four possible capacity levels a firm must evaluate when deciding how to set budgeted fixed manufacturing cost rates, including the pros and cons of selecting each capacity level. Explain the potential impact this decision would have on fi..

#### Future value of an annuity

Your client is 23 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save \$8,000 per year; and you advise her to invest it in the stock market, which you expect to provide an average return ..

#### Finding the required interest rate

Your parents will retire in 29 years. They currently have \$340,000 saved, and they think they will need \$1,950,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds?

#### Effective rate of interest

Find the interest rates earned on each of the following. You borrow \$710 and promise to pay back \$781 at the end of 1 year. You borrow \$82,000 and promise to pay back \$293,821 at the end of 7 years.

#### Nominal rate does land bank offer on its savings accounts

On its savings accounts, the Gulf Bank offers a 2 percent nominal interest that is compounded monthly. Savings accounts at the Land Bank have the same effective annual return, but interest is compounded quarterly. What nominal rate does the Land Bank..

#### How long will it be before she pays off the card

Briana recently received a credit card with a 14.6 percent nominal interest rate that is compounded monthly. With the card, she purchased a new MacBook Air for \$965. The minimum payment on the card is \$19 per month. If she makes the minimum payment o..

#### Time for a lump sum to double

If you deposit money today in an account that pays 6% annual interest, how long will it take to double your money?

#### Present and future values of a cash flow stream

An investment will pay \$150 at the end of each of the next 3 years, \$250 at the end of Year 4, \$400 at the end of Year 5, and \$500 at the end of Year 6. If other investments of equal risk earn 12% annually, what is its present value?

#### Growth rates-at what rate have sales been growing

Sawyer Corporation's 2015 sales were \$14 million. Its 2010 sales were \$7 million. At what rate have sales been growing?

#### Loan amortization and EAR

You want to buy a car, and a local bank will lend you \$25,000. The loan will be fully amortized over 5 years (60 months), and the nominal interest rate will be 12% with interest paid monthly. What will be the monthly loan payment?

### Similar Q& A

#### Find expected rate of return on market-market risk premium

Stock A has a beta of .6, and investors expect it to return 5%. Stock B has a beta of 1.4, and investors expect it to return 7%. Use the CAPM to find the expected rate of return on market and the market risk premium.

#### Both systems are to be depreciated straight-line to zero

Lang Industrial Systems Company (LISC) is trying to decide between two different conveyor belt systems. System A costs \$244,000, has a four-year life, and requires \$76,000 in pretax annual operating costs. System B costs \$342,000, has a six-year life..

#### What is the most important part of business plan in general

What is the most important part of a business plan in general? Considering the way you intend to use your business plan, what will be the most important part specific to your plan?

#### How much money do you have in the account

You have been diligently saving to buy a boat. For the last 10 years, you have been putting \$50 per month into a secret savings account paying .5% interest per year. You started with \$0. You just discovered that your spouse knew about the account the..

#### Issue preferred shares under current market conditions

Deltona issued preferred shares four years ago at \$60 per share, with a promised dividend of \$5 per share. The company's tax rate is 35%, and its common stock beta is 0.80. Yields on comparable risk preferred stocks are 9%. The floatation expense per..

#### What is pretax cost of debt and cost of equity capital

MV corporation has debt with Market value of \$100 million, common equity with a book value of \$100 million, and preferred stock woth \$20 million outstanding. Avicorp has a \$10 million debt issue outstanding, with a 6% coupon rate. The debt has semian..

#### What would be the the stock value in five years

The most recently paid dividend by Bridges & Associates was \$0.625 per share. The annual growth of its dividends is expected to be 20%, 25% and 35% in the following 3 years. After 3 years, dividend growth will slow down to a constant rate of 6% a yea..

#### What is this employee benefit worth to you today

Your employer contributes \$75 a week to your retirement plan. Assume that you work for your employer for another 20 years and that the applicable discount rate is 7.5 percent. Given these assumptions, what is this employee benefit worth to you today?

#### Axis of the figure and intercept for market security line

The risk-free interest rate 2% and the mean return on the market portfolio of risky assets is 8%. You are analyzing three individual stocks. The first has a mean return of 5.5% and a beta of 0.5. The second has a mean return of 6.5% and a beta of 0.7..

#### What is the amount of the firms current assets

Killer Whale, Inc. has the following balance sheet statement items: total current liabilities of \$693186; net fixed and other assets of \$1832451; total assets of \$3472745; and long-term debt of \$806548. What is the amount of the firm's current assets..

#### Signed a professional contract to play cricket

Suppose you have just signed a professional contract to play cricket in Argentina. The contract is for 4 years and is as follows. You get an immediate signing bonus of \$280,000, followed by four years of quarterly payments of \$75,000. You plan to inv..

#### What is the percentage price change of bonds

Bond J has a coupon rate of 6 percent and Bond K has a coupon rate of 12 percent. Both bonds have 19 years to maturity, make semiannual payments, and have a YTM of 9 percent. If interest rates suddenly rise by 2 percent, what is the percentage price ..