MindTap Cengage Learning MINDTAP Q Searc Ch 05: Assignment The Time Value of Mon
ID: 2817456 • Letter: M
Question
MindTap Cengage Learning MINDTAP Q Searc Ch 05: Assignment The Time Value of Money Present value of annuity calculations are widely used for loan amortization and capital recovery problems. Both loan amortization and capital recoveny problems require the calculations of annuity based on a given required rate of retur Suppose you invest in your friend's business. The process in which you determine the annuity amount needed to regain the invested capital is called Ian loaned his friend $35,000 to start a new business. He considers this loan to be an investment, and therefore requires his friend to pay him an interest rate of 5% on the loan. He also expects his friend to pay back the loan over the next four years by making annual payments at the end of each year. Ian texted and asked that you help him agreed-upon 5% on his nvestment. calculate the annual payments that he should expect to receive so that he can recover his initial investment and earn the Caloulate the annual payment and complete the following capital recovery schedule 35,00000PaymentInterest $35,000.00 Interest Principal Year Amount Payment Ending Balance $0.02 2 4Explanation / Answer
Answer of fill in the balnk is : capital recovery schedule or ammortization schedule
Year Beginning amount payment interest paid Principal paid ending balance 1 $ 35,000.00 $ 9,870.41 $ 1,750.00 $ 8,120.41 $ 26,879.59 2 $ 26,879.59 $ 9,870.41 $ 1,343.98 $ 8,526.43 $ 18,353.15 3 $ 18,353.15 $ 9,870.41 $ 917.66 $ 8,952.76 $ 9,400.39 4 $ 9,400.39 $ 9,870.41 $ 470.02 $ 9,400.39 $ 0.00