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What rate of interest is being paid on the loan

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Q1. Bridgeport Company purchased a machine at a price of $92,800 by signing a note payable, which requires a single payment of $123,517 in 3 years. Assuming annual compounding of interest, what rate of interest is being paid on the loan?

Q2. Assume that Sonic Foundry Corporation has a contractual debt outstanding. Sonic has available two means of settlement. It can either make immediate payment of $2,072,000, or it can make annual payments of $283,200 for 15 years. Payments must begin now and be made on the first day of each of the 15 years, what payment method would you recommend assuming an expected effective-interest rate of 11% during the future period? What is the present value of annual payment?

Reference no: EM132504681

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