User Account

All Pages

How much money will john have at the end of year seven

Assignment Help Accounting Basics
Reference no: EM133015567

Question -

Q1. John plans to invest $10,000 at the end of each year for 7 years on a project. This project will pay him a rate of return of 10% per annum. How much money will John have at the end of year 7?

Q2. You want to purchase a house. The house costs $500,000. You have $50,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price.

(a) The ABC bank offers a 30-year mortgage that requires annual payments and has an interest rate of 6% per year. What will your annual payment be if you sign up for this mortgage?

(b) Suppose you take the 30-year mortgage in part (a), how much will you still owe on the mortgage after 10 years?

(c) Assume now you are at the end of year 10, and you have just made your annual payment. You have decided to refinance your mortgage with a monthly payment of $3,000 with ABC bank at an interest rate of 5% p.a. With this plan, how much earlier will you be able to pay off the mortgage?

(d) Assume there is another bank: BetterDeal Bank offer you another refinance option. It is still a monthly payment at $3,000 per month but with the interest rate at 5% p.a. compounding quarterly. Would you prefer this deal or the deal with ABC bank in part (c)? Explain.

Reference no: EM133015567

Questions Cloud

What the project internal rate of return : If a project costing $40000 has a profitability index of 1 and the discount rate was 24%, then what the project's internal rate of return
Identify the minimum required rate of return : A project costing $1,000 is expected to generate cash flows of $200 per year for the next 15 years. Identify the minimum required rate of return
What is the market cap of each stock : What is the market cap of each stock? What is the growth in earnings? What is the profit margin? What is the Beta?
Calculate the net present value : Calculate the net present value (NPV) of the proposed new equipment, using the cash flows method. Provide all calculations
How much money will john have at the end of year seven : This project will pay him a rate of return of 10% per annum. How much money will John have at the end of year 7
What would operating income have been for the company : If the Round Game had been discontinued before the last quarter, what would operating income have been for the company as a whole
Estimate the after-tax cash flows for the project : It will be fully depreciated on a straight-line basis over 10 years. Estimate the after-tax cash flows for project using accounting flow and the cash flow table
Prepare journals to record the transactions : Digger Ltd invited the public to subscribe to the issue of 3,000,000 shares for $2.25 per share. Prepare journals to record the transactions
Teams ability to complete the project : You are now quite worried about your team's ability to complete the project by the deadline, knowing full well that defaulting on this commitment

Reviews

Write a Review

Accounting Basics Questions & Answers

  The expense recognition principle relates to credit losses

The expense recognition principle relates to credit losses by stating

  Compute depreciation under the straight-line

Compute depreciation under the straight-line, units-of-output, working hours, sum-of-the-years'-digits, and double-declining-balance methods

  Indicate the tax consequences of the events

Indicate the tax consequences of the events in 2018, 2019, and 2020 on Mr. Farrow's Net Income For Tax Purposes and on his Taxable Income

  How will operating income be affected

Pottery Unlimited has two product lines: cups. If $20412 in fixed costs will be eliminated by dropping the CUP line, how will operating income be affected?

  Account at the beginning of the first month

A savings account earns 8.4% (APR) interest calculated monthly, paid into the account at the end of 6 months. Cooper deposits $200 into the account at the beginning of the first month.

  How much tax will he pay on the dividends

he 20% balance is allocated to interest paid on the mutual fund's corporate bond holdings. How much tax will he pay on the $1,000 of dividends

  Financial impact of buying ct unit

The user has updated the question: User's response: Calculate the financial impact of buying a CT unit that would cost $3.0 million, would have a five-year useful life, would have a 10 percent salvage value.

  Winnys office furniture has a contribution margin ratio of

winnys office furniture has a contribution margin ratio of 16. if fixed costs are 177300 how many dollars of revenue

  Issued various types of bonds such as term bonds

Potlatch Corporation has issued various types of bonds such as term bonds, income bonds, and debentures. Differentiate between term bonds, mortgage bonds, debenture bonds, income bonds, callable bonds, registered bonds, bearer or coupon bonds, co..

  Calculate the depreciation using the straight-line method

Calculate the depreciation using the: Straight-line method of depreciation Units-of-production method of depreciation

  How much must they invest today

The company you work for wants to purchase a new piece of equipment that is estimated to cost $100,000 3 years from now. How much must they invest today

  How your answer change if the land has depreciated in value

As a separate endeavor, Jackson has also invested in several undeveloped tracts of land. He hopes that the land will appreciate in value so that he can profit.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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