What interest rate are your parents charging estimated up to

Assignment Help Financial Management
Reference no: EM132316441

Question

You owe $48,000 to your parents for funding some of your college. You promise to make 6 annual payments of $10,000 to settle your debt. Approximately what interest rate are your parents charging (estimated up to 2 decimal places), if you make the 6 annual payments beginning one year from now?

Your grandparents offered you some money when you do ACC 201 this fall. You are offered the following options. Assuming an annual interest rate of 4.0%, which option should you choose? Show your work for each alternative

a. Receive $30,000 immediately

b. Receive $4,100 at the end of each six months for four years. You will receive the first check in six months

c. Receive $3,900 at the end of each year for four years, and then $20,000 at the end of the fifth year.

Reference no: EM132316441

Questions Cloud

What is net income for the year : Conner Company started the year with common stock of $35,000 and paid in capital in excess of par of $70,000. There were no new stock issuances.
Compute the value of the lease liability to the lessee : Suppose Harrisburg estimates the residual value at the end of the lease term to be $40,000, but still guarantees a residual of $50,000.
Describe the appropriate accounting requirements : Describe the appropriate accounting and disclosure requirements for events occurring after the reporting period.
Does it have a primarily functional or practical purpose : Consider the following questions before stating your selections. You do not need to answer all of these questions, but they may guide you in choosing potential.
What interest rate are your parents charging estimated up to : What interest rate are your parents charging estimated up to 2 decimal places, if you make the 6 annual payments beginning one year from now?
Prepare the sales budget for mitchell inc : Prepare the Sales Budget for Mitchell Inc.. Sales for the final quarter of the prior year total 300 units sales in units for the current year.
Illustrates the techniques and value of managing risk : Research an article, book or tool that is pertinent to this class and illustrates the techniques and value of managing risk.
Opportunity impact upon training in the workforce : How does Equal Employment Opportunity impact upon training in the workforce?
Evaluate how organizational cultures are perceived : Evaluate how organizational cultures are perceived and how problem solving and creativity are promoted with organizational diversity

Reviews

Write a Review

Financial Management Questions & Answers

  Prepare calculation of taxable income

Prepare a calculation of taxable income for a S corporation owned equally by Henry, Iris, and Jasmine and indicate the tax form(s) to report business activity.

  Considering new three-year expansion project

Mercy Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.85 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life.

  Why are options on bond futures more actively traded

Explain the difference between a call option on yen and a call option on yen futures. -  Why are options on bond futures more actively traded than options on bonds?

  Calculate the cpm for the total audience

Task: Calculate the CPM for the total Audience, 18-34, 35-49 and 18-49. Please show work.

  What is effective rate of interest

What is the effective rate of interest? What would the effective rate be if Carey were required to make 12 equal monthly payments to retire the loan?

  Yield to call-yield to maturity and market rates

Absalom Motors's 8% coupon rate, semiannual payment, $1,000 par value bonds that mature in 10 years are callable 6 years from now at a price of $1,025. The bonds sell at a price of $1,254.87, and the yield curve is flat. Assuming that interest rates ..

  What is the effective annual rate for the bond

A six-month T-Bill has a market price of $983 on a face value of $1,000. What is the effective annual rate (EAR) for the bond?

  What will be the effect on cash flows of this sale

Suppose you sell a fixed asset for $110,000 when its book value is $130,000. If your company’s marginal tax rate is 35 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?

  Transfer arrangements would ensure that maxwells assets

Which of the following transfer arrangements would ensure that Maxwell’s assets will be transferred to Jane at Maxwell’s death?

  What is the length of the inventory period

Stoney Brooke, Inc. has sales of $1,000,000 and cost of goods sold of $734,700. The firm had a beginning inventory of $39,000 and an ending inventory of $54,000. What is the length of the inventory period?

  Formulate the supplier selection model

An optimization model, suitable for the selection of suppliers of a single commodity, can be defined if the following data are available.- Formulate the supplier selection model.

  Provisions often result in reduced stockholder wealth

Explain why Poison Pills provisions often result in reduced Stockholder wealth.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd