What is the effective annual interest rate

Assignment Help Accounting Basics

Reference no: EM131812162

Refer to the following lease amortization schedule. The 10 payments are made annually starting with the inception of the lease. Title does not transfer to the lessee and there is no bargain purchase option or guaranteed residual value. The asset has an expected economic life of 12 years. The lease is noncancelable.

Payment	Cash Payment	Effective Interest	Decrease in balance	Balance
				63,282
1	10,000		10,000	53,282
2	10,000	6,394	3,606	49,676
3	10,000	5,961	4,039	45,638
4	10,000	5,477	4,523	41,114
5	10,000	4,934	5,066	36,048
6	10,000	4,326	5,674	30,373
7	10,000	3,645	6,355	24,018
8	10,000	2,882	7,118	16,901
9	10,000	?	?	?
10	10,000	?	?	?

What is the effective annual interest rate?

Reference no: EM131812162

Questions Cloud

Find expected value of the number of customers in system : An M/M/8 queueing system is similar to an M/M/1 system except that it has infinitely many servers. Therefore, all customers will be served upon arrival.

Assuming reversing journal entries : Prepare the journal entry to pay the first interest payment on December 31, assuming reversing journal entries were posted at the beginning of the new year

Calculate the manufacturing cost markup needed : Isaac Company has estimated the following costs for this year for 240,000 units: alculate the manufacturing cost markup needed to obtain a target profit

Should a firm attempt to have fewer or more suppliers : Should a firm attempt to have fewer or more suppliers? What are the advantages and disadvantages of each approach?

What is the effective annual interest rate : Title does not transfer to the lessee and there is no bargain purchase option or guaranteed residual value.

How many operators should the airline hire : Suppose that ? = µ. How many operators should the airline hire so that the probability that a call is lost is at most 0.004?

Discuss how constituents captured the setting of ifrs : How constituents captured the setting of IFRS 6, an accounting standard for the extraction industries

How do you get the left side of this chart : Prepare two contribution format income statements, one showing the results of last year's operations and one showing what the results of operations would.

Identify and assess an intrapreneurial opportunity : Identify and assess an intrapreneurial opportunity within a company and assess its impact with respect to both the level of effort and resources needed.

User Account

All Pages