How long it will take to repay loan with initial proceeds

Assignment Help Financial Management

Reference no: EM131188973

Mike French wishes to determine how long it will take to repay a loan with initial proceeds of $14,000 where annual end-of year instalment payments of $2,450 are required.

a. How long will it take for him to repay the loan fully If Mike can borrow at annual rates of interest at: i. 12% ii. 9% iii. 15%

b. Reviewing your answers to the above part, describe the general relationship between the interest rate and the amount of time it will take Mike to repay the loan fully.

Reference no: EM131188973

Questions Cloud

Companies secure themselves against market fluctuations : Companies secure themselves against market fluctuations (they engage in hedging) – What are the cost? – What do they gain? Price-earnings ratio: Does this indicator fit to the theory of capital markets? You identify a good investment project – Unfort..

What is the effect on the return on equitiy : What is the effect on the return on equitiy if a company increases the dividends? How does leveraging (increasing debt) affect company value? How do you value an investment abroad and in a different currency?

How does it auditing differ from financial auditing : Reflect on the skills you have gained from this course and how the skills may prepare you for an information technology auditing career. How does IT auditing differ from financial auditing? Make a list of the skills you think are important for financ..

What is the cost of the equipment : The internal rate of return from an investment in new equipment is expected to be 8.5% p.a. If the returns are expected to be $45811 at the end of the first year, -$2568 at the end of the second year and $68825 at the end of the third year, what is t..

How long it will take to repay loan with initial proceeds : Mike French wishes to determine how long it will take to repay a loan with initial proceeds of $14,000 where annual end-of year instalment payments of $2,450 are required.

Equity-financed firm plans to grow at an annual rate : An all-equity-financed firm plans to grow at an annual rate of at least 16%. Its return on equity is 24%. What is the maximum possible dividend payout rate the firm can maintain without resorting to additional equity issues?

Program that requests a student : Write a C program that requests a student to enter his/her marks then grade the student. Use conditional statements to make sure that all the possible grades are included?

Problem regarding the relational operations : What are the relational operations that can be performed on the database?

Why is the investment appraisal process so important : Why is the investment appraisal process so important? The concept of relevance applicable to the determination of the project's cash flows stating all assumptions made. What are the criticisms of the methods used in the investment appraisal process

User Account

All Pages