---
37. Amortizing Loan. Consider a 4-year amortizing loan. You borrow $1,000 initially, and repay it in four equal annual year-end payments.
If the interest rate is 8 percent, show that the annual payment is $301.92
Fill in the following table, which shows how much of each payment is interest versus principal repayment (that is, amortization), and the outstanding balance on the loan at each date.
Time Loan Balance Year-End Interest Due on Balance Year-End Payment Amortization of Loan
0 $1,000 $80 $301.92 $221.92
1 ????? ????? 301.92 ?????
2 ????? ????? 301.92 ?????
3 ????? ????? 301.92 ?????
4 0 0
5 Bond Pricing. If Circular File wants to issue a new 6-year bond at face value, what coupon rate must the bond offer?
6. Bond Yields. An AT&T bond has 10 years until maturity, a coupon rate of 8 percent, and sells for $1,100.
... 36. Amortizing Loan. ... What is the principal balance on the loan? ... Which bond will suffer the greater percentage decline in price: a 30-year bond paying annual ...
... 2. An amortized loan is the most common form of loan... In cases of non-payment both the loan principal and ... 2. Some of these loans are not secured and thus form a ...
... of a detailed explanation to calculate the present values, the bond price, and ... Time Loan Balance Year-End Interest Due on Balance Year-End ... 38. Amortizing Loan. ...
Total Assets, EPS, EBIT, Debt Ratio and Amortization of Loan. ... 3. 50,000 ordinary shares issued at $22 per share 4. 10,000 units of coupon bonds with a coupon ...
... d. Which accounting approach - amortized cost or fair ... you believe Mason should use for the loan? ... market fluctuations when investments are financed with loans. ...
... risk are currently earning 11 percent, the firmʹs bond will sell ... with issues in accounting: present value of annuity, future value,loan amortization etc. 1. ...
... 5. Of the unamortized discount on bonds payable, $2,000 will be amortized in 2005. 6. The notes payable represent bank loans that are secured by long-term ...
... c. If the required return were at 12% instead of 10%, what would the current value of Complex Systems' bond be? ... The loan is amortized into three equal ...
