Boston company completed the following transactions use a 9

Reference no: EM13569970

Boston Company completed the following transactions use a 9 percent annual interest rate for all transactions a. Borrowed $103,000 for nine years. Will pay $9,270 interest at the end of each year and repay the $103,000 at the end of the 9th year. b. Established a plant addition fund of $520,000 to be available at the end of year 8. A single sum that will grow to $520,000 will be deposited on January 1, 2011. c. Agreed to pay a severance package to a discharged employee. The company will pay $84,000 at the end of the first year, $122,500 at the end of the second year, and $146,000 at the end of the third year. d. Purchased a $130,000 machine on January 1, 2011, and paid cash, $35,000. A eight-year note payable is signed for the balance. The note will be paid in eight equal year-end payments starting on December 31, 2011. In transaction (a), determine the present value of the debt. In transaction (c), determine the present value of this obligation. In transaction (b), what single sum amount must the company deposit on January 1, 2011? What is the total amount of interest revenue that will be earned?

Reference no: EM13569970

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