How much is the annual payment on your new car loan

Assignment Help Financial Accounting
Reference no: EM132939827

Question - Imagine you are finally able to buy your first classic sports car. To do so, you have arranged to borrow $72,500 from your local savings and loan association. The interest rate on the loan is 5.00%. To simplify the calculations, assume that you will repay your loan over the next seven years by making annual payments at the end of each year. According to the loan officer at the savings and loan association, you must answer the following questions before you can go pick up your new car.

Required -

1. How much is the annual payment on your new car loan?

2. How much of your Year 2 payment will constitute interest on your loan?

3. How much of your Year 3 payment will be used to repay principal on the loan?

4. How much will you pay in total interest to finance the purchase of your $72,500 car?

Reference no: EM132939827

Questions Cloud

What the amounts to be recorded for the building : Wong will invest P500,000 cash. For the partnership, what the amounts to be recorded for the building and for Chua's Capital account
Which of the conclusions is correct for norris inc : Norris Inc. calculated the net present value for a potential investment project, which is estimated to yield. Which of the following conclusions is correct?
What is Art hourly rate of pay : Art receives a semi-monthly salary of $837.27 and works a regular workweek of 37.5 hours. What is Art's hourly rate of pay
Which of the projects would be considered independent : Which of the projects would be considered independent, assuming the company has adequate capital? A project to build new parking lot on an unused piece of land.
How much is the annual payment on your new car loan : To do so, you have arranged to borrow $72,500 from your local savings and loan association. How much is the annual payment on your new car loan
Which project should rts accept : Project B has an initial investment of $350,000 and produces incremental operating annual cash flows of $110,000 for 6 years. Which project(s) should RTS accept
Prepare journal entry to record depletion for second year : In the second year, 150,000 tons of ore are extracted but only 125,000 tons are sold. Prepare the journal entry to record depletion for the second year.
What type of adjustment to weighted-average cost of capital : A manager who tends to be risk, The manager will likely apply what type of adjustment to the weighted-average cost of capital (WACC) for a risky project?
Essay on future of electric vehicles : Flow from a logical start to a strong conclusion. They also need to demonstrate the significance and important in a global business perspective

Reviews

Write a Review

Financial Accounting Questions & Answers

  How many units should hoover produce

How many units should Hoover produce? Hoover Electronics has beginning inventory of 16,500 units, will sell 55,000 units for the month.

  What amount of cash will be collected for interest revenue

What amount of cash will be collected for interest revenue in 2019? What is the amount of interest receivable as of Dec. 31, 2019?

  Prepare the journal entries to record these transactions

Suppose your company sells services of $150 in exchange for $120 cash and $30 on account. Depreciation of $50 also is recorded. Prepare the journal entries to record these transactions. Calculate the amount that should be reported as net cash flow fr..

  What is the net present value or npv of the project

Bill plans to open a do-it-yourself taco, What is the Net Present Value (NPV) of this project with a 10% discount rate? Should we accept/rejectthis project?

  Previously used the equipment in his sole proprietorship

Liz and John formed the equal LJ Partnership on January 1 of the current year. Liz contributed $80,000 of cash and land with a fair market value of $90,000 and an adjusted basis of $75,000. John contributed equipment with a fair market value of $170,..

  Calculate the retained earnings as of december

Calculate the retained earnings (deficit) as of December 31, 2017 (show your work). Then, prepare the shareholders' equity section of the balance sheet

  Describe the correct treatment for the purchase

Describe the correct treatment for the purchase of this machinery in the profit and loss account and the cash flow statement.

  Compute for the cost of goods sold for the period

Factory labor hours utilized, 2,000 hours. This include 200 hours worked as overtime. Compute for the cost of goods sold for the period.

  What is the advantages and disadvantages as a borrower

What is the advantages and disadvantages as a borrower or from the perspective of the lending institution

  What is the balance in allowance for sales returns account

Rusty Hardware makes only cash sales. It began 2016 with a credit balance of $32,000 in the refund liability account. Sales during 2016 were $600,000. Rusty estimates that 6% of all sales will be returned. During 2016, customers returned merchandise ..

  Create the stockholders equity section of the balance sheet

Create the stockholders' equity section of the balance sheet at the end of the year. (Amounts to be deducted should be indicated with a minus sign.)

  Determine the income statement and balance sheet effects

Determine the income statement and balance sheet effects of not accruing pay- roll taxes at March 31, 2013. Assume that when the payroll taxes were paid in April 2013, the payroll tax expense account was charged.

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