Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you borrowed some money at 8 percent per annum. yo

You borrowed some money at 8 percent per annum. You repay the loan by making three...

Free

60.1K

Verified Solution

Question

Finance

You borrowed some money at 8 percent per annum. You repay theloan by making three annual payments of $ 150 (first payment madeat t = 1), followed by five annual payments of $ 561 , followed byfour annual payments of $ 894 . How much did you borrow?(Round your answer to 2 decimal places; record your answerwithout commas and without a dollar sign).

Answer & Explanation Solved by verified expert
4.3 Ratings (631 Votes)

Amount borrowed is the present value of cash flows.
Year Cash flow Discount factor Present value
a b c=1.08^-a d=b*c
1 $        150      0.9259 $     138.89
2 150      0.8573         128.60
3 150      0.7938         119.07
4 561      0.7350         412.35
5 561      0.6806         381.81
6 561      0.6302         353.53
7 561      0.5835         327.34
8 561      0.5403         303.09
9 894      0.5002         447.22
10 894      0.4632         414.09
11 894      0.4289         383.42
12 894      0.3971         355.02
Total $ 3,764.44
So, amount borrowed is $ 3,764.44

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

You borrowed some money at 8 percent per annum. You repay theloan by making three annual payments of $ 150 (first payment madeat t = 1), followed by five annual payments of $ 561 , followed byfour annual payments of $ 894 . How much did you borrow?(Round your answer to 2 decimal places; record your answerwithout commas and without a dollar sign).

Other questions asked by students

Q

The US economy was hit two shocks at the onset of the 2008 Global Financial crisis....

Economics
Q

E OF FORCES NEWTON S THIRD LAW FREE BODY DIAGRAM An object of 5 kg...

Physics
Q

In the figure given below there are two convex lens L and L having focal...

Physics
Q

50 10 4 2d 3d 7 12 5 3 5z 3 14 Kimmic 9 10

Algebra
Q

Perform the indicated operation 16 x 2x 15 16 x 2x 15 9 X 3...

Algebra
Q

16.23 16.24 16.25 16.35 16.36 16.37 16.39 16.41 16.45 16.46 Data Input Raspberries...

Accounting
Q

Jack and Dan agree to go into business together selling clothing. According to the agreement,...

Accounting
Q

Preparing common-size income statement Data for Connor, Inc. and Alto Corp.follow Connor Alto Net Sales...

Accounting
Q

Properly drafted organizing documents for an exempt organization include which of the following? A powers...

Accounting
Q

Two years ago, your company bought $45,000 in bonds from another company. This month, it...

Accounting
Q

Which of the following is not included among the assumptions needed to estimate postretirement healthcare...

Accounting
Q

what is the ending balancs in retained earnings? Lorna Company...

Accounting