a. Riverbed, Inc. owes $38,510 to Ritter Company. How much would Riverbed have t

Question

a. Riverbed, Inc. owes $38,510 to Ritter Company. How much would Riverbed have to pay each year if the debt is retired through four equal payments (made at the end of the year), given an interest rate on the debt of 8%? Amount paid each year = ?

b. Nash Inc. issues $2,099,400 of 11% bonds due in 10 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 12%. What amount will Nash receive when it issues the bonds?
Amount received by Nash when bonds were issued = ?

c. Using the appropriate interest table, compute the present values of the following periodic amounts due at the end of the designated periods. $52,210 payable at the end of the seventh, eighth, ninth, and tenth periods at 11%
Present value = ?

d. Martinez Corporation, having recently issued a $20,069,100, 15-year bond issue, is committed to make annual sinking fund deposits of $616,800. The deposits are made on the last day of each year and yield a return of 10%. Determine the amount of deficiency.
Deficiency = ?

e. On January 1, 2017, Buffalo Corporation purchased 333 of the $1,000 face value, 9%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2027, and pay interest annually beginning January 1, 2018. Buffalo purchased the bonds to yield 11%. How much did Buffalo pay for the bonds?
Buffalo must pay for the bonds

f. Buffalo Corporation purchased a special tractor on December 31, 2017. The purchase agreement stipulated that Buffalo should pay $20,180 at the time of purchase and $5,020 at the end of each of the next 8 years. The tractor should be recorded on December 31, 2017, at what amount, assuming an appropriate interest rate of 12%?

Explanation / Answer

we are supposed to solve 4 parts when multiple posted

a)use pmt formuale in excel
=pmt(rate,nper,pv,fv,type)
=pmt(8%,4,38510,0,0)=11626.97
b)use pv formuale in excel to find this
=pv(rate,nper,pmt,fv,type)
=pv(12%,10,(2099400*11%),2099400,0)
=1980779.22
c)use pv formuale in excel
seventh=pv(11%,7,0,52210,0)=25147.39
eight=pv(11%,8,0,52210,0)=22655.30
ninth=pv(11%,9,0,52210,0)=20410.18
tenth=pv(11%,10,0,52210,0)=18387.55
d)use fv formuale in excel
=fv(rate,nper,pmt,pv,type)
=fV(10%,15,616800,0,0)=19597266.71
defeciency=20069100-19597266.71=471833.29

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