Business, 18.06.2020 15:57, molinaemily009
Sanders Co. is planning to finance an expansion of its operations by borrowing $150,000. City Bank has agreed to loan Sanders the funds. Sanders has two repayment options: (1) to issue a note with the principal due in 10 years and with interest payable annually or (2) to issue a note to repay $15,000 of the principal each year along with the annual interest based on the unpaid principal balance. Assume the interest rate is 8 percent for each option.
Required
a. What amount of interest will Sanders pay in year 1 under option 1 and under option 2?
Amount of Interest
Under option 1
Under option 2
b. Wihat anount of insyinyder option 1 and under option 27 (Round your final answers to the nearest dollar amount)
Amount of Interest
Under option 1
Under option 2
c. Which option is more advantageous to Sanders?
A. Option 1
B. Option 2
Answers: 2
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Gulliver travel agencies thinks interest rates in europe are low. the firm borrows euros at 5 percent for one year. during this time period the dollar falls 11 percent against the euro. what is the effective interest rate on the loan for one year? (consider the 11 percent fall in the value of the dollar as well as the interest payment.)
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Juniper company, inc. uses a perpetual inventory system. the company purchased $9,750 of merchandise on august 7 with terms 1/10, n/30. on august 11, it returned $1,500 worth of merchandise. on august 16, it paid the full amount due. the correct journal entry to record the payment on august 16 is:
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Sanders Co. is planning to finance an expansion of its operations by borrowing $150,000. City Bank h...
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