A borrower has two alternatives for a loan: (1) issue a $630,000, 75-day, 6% note or (2) issue a $630,000, 75-day note that the creditor discounts at 6%. Assume a 360-dayyear. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.XOpen spreadsheeta. Compute the amount of the interest expense for each option. Round your answer to the nearest dollar.for each alternative.b. Determine the proceeds received by the borrower in each situation. Round your answers to the nearest dollar.< (1) $630,000, 75-day, 6% interest-bearing note: $(2) $630,000, 75-day note discounted at 6%: $c. Alternativeis more favorable to the borrower because the borrower Gmail <- YouTubeFileDuA112356template - Saved V78Home917InsertDATANumber of days per yearPrincipal amount of note10Note interest rate11 Note discount rate12 Term of note, days132425tDrawArial262728293031ABEvaluating alternative notesThe data for two alternatives for a loan are provided in the table below.GPage LayoutX✓ fx Evaluating alternative notes10Workbook Statistics= Data +FormulasCOO36018192021 a. Amount of the interest expense for each alternative22 b. Proceeds received by the borrower23B & AvX1-NondiscountedNote alternatives$630,000Data6%75DReview2-Discounted14 REQUIRED:15 Determine the amount of interest for each alternative and determine the cash proceeds received by the borrower for each alternative.16Using formulas and cell references from the problem data, perform the required analysis. Formulas entered in thegreen cells show in the orange cells. Transfer amounts to CNOWv2 for grading.$630,0006%75Search for tools, help, and more (Option + Q)HelpEv abView12 A19EFNote alternatives1-Nondiscounted 2-DiscountedGeneralFormulas>tvG$.00.00→.0HIalı2K+ALMGive Fee

Interest expense is the cost incurred for borrowing the fund. Interest is calculated on the…

Answered: A borrower has two alternatives for a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A borrower has two alternatives for a loan: (1) issue a $360,000, 75-day, 6% note or (2) issue a $360,000, 75-day note that the creditor discounts at 6%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. $ ________________________ Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar. (1) $360,000, 75-day, 6% interest-bearing note: $___________________________ (2) $360,000, 75-day note discounted at 6%: $ _________________________
A borrower has two alternatives for a loan: (1) issue a $420,000, 30-day, 6% note or (2) issue a $420,000, 30-day note that the creditor discounts at 6%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. $ fill in the blank 2 for each alternative. Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar. (1) $420,000, 30-day, 6% interest-bearing note: $ fill in the blank 3 (2) $420,000, 30-day note discounted at 6%: $ fill in the blank 4 Alternative 1 is more favorable to the borrower because the borrower receives more cash .
1) Use the Loan worksheet to complete the loan amortization table.  In cell F2, insert the IPMT function to calculate the interest for the first payment. Copy the function to the range F3:F25. (The results will update after you complete the other functions and formulas.) 2) In cell G2, insert the PPMT function to calculate the principal paid for the first payment. Copy the function to the range G3:G25. 3) In cell H2, insert a formula to calculate the ending principal balance. Copy the formula to the range H3:H25. 4) Now you want to determine how much interest was paid during the first two years.  In cell B10, insert the CUMIPMT function to calculate the cumulative interest after the first two years. Make sure the result is positive. 5) In cell B11, insert the CUMPRINC function to calculate the cumulative principal paid at the end of the first two years. Make sure the result is positive. 6) You want to perform a what-if analysis to determine the rate if the monthly payment is…
With loans, spreadsheets make it easy to _____. (can be more than 1 of the options listed below) a. Calculate the amortization schedule b. Determine the number of remaining loan payments c. Find the loan balance due at any time d. Demonstrate the split between the principal and interest amounts.
Alexa takes out a loan of 94,000 at an annual effective discount rate of 6%. The loan is to be repaid with annual payments of 10,000. The first payment is due 4 years after the loan is taken out. Calculate the amount of the drop payment. Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answwer.
Find the interest earned on $5,750 deposited into a savings account for 3 1/2 years at an annual interest rate of 4 1/2% a. What formula should be used? b. What are you trying to find and what variable does it represent in the formula? c. Solve the problem showing all of your work (must show all steps!!) d. Interpet your answer using a complete sentence You may use the box below to upoload a picture of your written explanation or type it out in the box. Use the "mountain" button to add pictures.
Evaluating alternative notes A borrower has two alternatives for a loan: (1) issue a $510,000, 45-day, 8% note or (2) issue a $510,000, 45-day note that the creditor discounts at 8%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet a. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. for each alternative. b. Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar. (1) $510,000, 45-day, 8% interest-bearing note: $ (2) $510,000, 45-day note discounted at 8% : $ $ c. Alternative is more favorable to the borrower because the borrower
Use Goal seek on the loan amount of $825,000. You would like the monthlypayment to be $4500.00. Find a solution for new loan amount, term, and Interestrate. Do not overwrite the Existing data on D3. Hint: Use Cancel when goal seekfinds a solution. Write the solution in the space provided on a spreadsheet.
Exploring Annuities with Microsoft Excel I. Objectives: To organize data and perform calculations using Microsoft Excel To find future values for an annuity To determine payment amounts for an annuity given a set goal To analyze the effect of time To research reasonable annuity rates and investment amounts for use in the above calculations II. Procedure: Sheet 1 - Future Value 1. Open a new Microsoft Excel (or Google Sheets) blank spreadsheet. 2. At the bottom of the page, it will show "Sheet 1". You can rename it "Future Value". a. Right click the "Sheet 1" tab and you will see an option to rename it. 3. Type "Payment Amount (P)" in cell A1. 4. Type "Rate (i)" in cell B1. 5. Type "Number of Payments per year (n)" in cell C1. 6. Type "Years (t)" in cell D1. Now the research.. You need to investigate reasonable annuity rates for our current market. You can choose a rate of your own using the information you find. Also, I want you to find out what investors suggest your payment amount…
RESOLVE THIS PROBLEM IN DIGITAL FORMAT (NOT HANDWRITTEN) Solve the following problem step by step, include the formulas you use and the development please How much should a person who owes $ 17,500 pay in interest if they are charged 17% interest four and a half months later?
Watch the Mathematics of Finance video and then answer the question given below. Simple interest loans are generally used for which type of loan? Click here to watch the video. Choose the correct description of a simple interest loan. A. Home Mortgage loans B. Short term loans of less than a year C. Car loans D. Long term loans of a year or more
Write each known variable’s value as it appears in the calculator and use a question mark for the missing variable. Then, in the space provided write the missing variable’s value, as it appears in the calculator. Finally, write your final answer in context, with units, as a complete sentence. Use a TVM Solver is necessary. Daniel plans on making monthly payments into an account that earns 3.5% compounded monthly. If he wants $15,000 in 20 years, what do his payments need to be? N _____________ I%_____________ Missing Variable Value_______________________ PV_____________ PMT____________ Context Sentence: FV______________ P/Y_____________ C/Y_____________

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