A.
Wissler, Inc. owes $273,000 to the bank for some improvements
made to its office building. The loan is for 60 months and the
monthly payment is $5,945.79 What is the interest rate on the
loan?
| RATe |
? |
| NPER |
60 |
| PV |
273000 |
| FV |
0 |
| PMT |
5945.79 |
| =RATE(60,5945.79,-273000,0,0)*12 |
11.07% |
|
Huggins Co. has identified an investment project with the
following cash flows.
If the discount rate is 9 percent, what is the present value of
these cash flows?
|
|
PV factor 9% |
PV |
| 1 |
790 |
0.917431 |
724.77 |
| 2 |
1070 |
0.841680 |
900.60 |
| 3 |
1330 |
0.772183 |
1027.00 |
| 4 |
1450 |
0.708425 |
1027.22 |
|
Present value |
3679.59 |
What is the present value at 17 percent?
|
|
PV factor17% |
PV |
| 1 |
790 |
0.854701 |
675.21 |
| 2 |
1070 |
0.730514 |
781.65 |
| 3 |
1330 |
0.624371 |
830.41 |
| 4 |
1450 |
0.533650 |
773.79 |
|
Present value |
3061.07 |
What is the present value at 25 percent?
|
|
|
PV factor17% |
PV |
| 1 |
790 |
0.800000 |
632.00 |
| 2 |
1070 |
0.640000 |
684.80 |
| 3 |
1330 |
0.512000 |
680.96 |
| 4 |
1450 |
0.409600 |
593.92 |
|
Present value |
2591.68 |
