Periodic Annuity Amounts & Present Value of Deferred Annuity
Not what you're looking for?
If I borrow 60,000 from the bank at 10% interest over the seven-year life of the loan, what equal annual payments must be made to discharge the loan plus pay the bank its required rate of interest. Annual payments_____. How much of this first payment will be applied to interest? to principal? Also how much of my second payment will be applied to interest? Principal?
Also I have purchased an annuity to begin payment at the end of 2011 (that is the date of the first payment). Assume it is now the beginning of the year 2009. The annuity is for 8,000 per year and is designed to last 10 years. - If the interest rate for this problem calculation is 13 percent, what is the most I should have paid for the annuity. (round PV Factor to 3 decimal places)
Purchase this Solution
Solution Summary
Using an Excel 97-2003 spreadsheet, this solution illustrates how to use Excel to compute the periodic annuity payments on a bank loan as well as the present value of a deferred annuity (i.e., one which starts in the future).
Purchase this Solution
Free BrainMass Quizzes
Introduction to Finance
This quiz test introductory finance topics.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.