What is the annual interest payment to the lender

Assignment Help Financial Management
Reference no: EM131907329

Kyle takes out a loan of 1000 at an annual effective interest rate of 6%. He makes level annual interest-only payments at the end of each year for 10 years. In addition, he makes level annual payments to a sinking fund that earns interest at an annual rate of 5%. At the end of 10 years, the sinking fund accumulates to the loan principal and Kyle repays the loan by a lumpsum payment.

a. What is the annual interest payment to the lender?

b. What is the level annual payment amount to the sinking fund?

c. What is Kyle's total payment at the end of each year?

Reference no: EM131907329

Questions Cloud

Compensating balance versus discount loan : Calculate the effective annual rate of interest on each loan. What could Weathers do that would reduce the effective annual rate on the State Bank? loan?
What is the financial break-even point point for the project : The appropriate discount rate is 10 percent. What is the financial break-even point point for the project?
Unsecured sources of short-term loans : Calculate the total interest cost over 180 days for a ?fixed-rate loan. Calculate the total interest cost over 180 days for a variable-rate loan.
What is the market value of the loan : Payments on the loan are $772.02 per month. Suppose now the interest rate is 15% annual, what is the market value of the loan for the remaining 15 years?
What is the annual interest payment to the lender : What is the annual interest payment to the lender? What is the level annual payment amount to the sinking fund?
What is the bond coupon rate : The face value of the bond is $1,000, and the market interest rate is 9%. What is the bond's coupon rate?
What was his annual rate of return on sculpture : What was his annual rate of return on this sculpture?
Periods of time with negative cash flows from investing : Can a firm continue to operate for extended periods of time with negative cash flows from investing?
Amortized by equal monthly payments : Anna's 300,000 loan is amortized by equal monthly payments for 25 years, What is the total of monthly payments over the last 10 years of the loan?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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