lime-co-incurs-a-4000-note-with-equal-principal-installment-payments-due-for-the-next-eight-years-wh

Question

Lime Co. incurs a $\$ 4,000$ note with equal principal installment payments due for the next eight years. What is the amount of the current portion of the noncurrent note payable due in the second year?
A. $\$ 800$
B. $\$ 1,000$
C. $\$ 500$
D. nothing, since this is a noncurrent note payable

Oluwadamilola Ameobi · Accepted Answer

So this question says that Lyme coal, which your company? In course, 4000 notes. So we have a notes off. We have a notes off $4000. Andi. It&#x27;s due. He has an equal. So the notes as equal installments payments. So we pay equal amounts for the next eight years. So the question says, What is the amount of the current question off the no current notes payable do in the second year. So I want to know how much you pay for the second year, which is basically yet so so for you to want to know how much you pay. So since we know that we&#x27;re paying equal installments every year, basically, just divide $4000 by eight years to find out what you paint each year, and that gives us 500. Are we paying equal payments for every year? So we&#x27;re still gonna pay 504 years to, So that&#x27;s the answer

Ankit Gupta · Answer

According to the question, if $4000 is borrowed at the rate off 5.75% interest per year compounded quarterly, we have to find amount to at the end of a given number of years. So the formula for amount you will be quarto is a core duty and toe one. Plus. I&#x27;ll divide by N hold race, but anti Where is the principal amount borrowed? I will be the rate off interest in decimal and is the number of times the interest is compounded for years, and he is the number off years. So, according to the question, is equal to $4000. Art is equal to 0.575 and and is equal to four because the interest is being compounded quarterly, hence in part 80 is equal to four years. So amount you will be quick to 4000 into one place, 0.5 75 divided by four whole dress part Ford and took four, which is 16. So this is coming out to be 5000 $26.16. In part B time is equipped to six years. Therefore amount will be equal to 4000 into one place, 0.575 The raid baseboard holders by 4 to 6. So this is coming out to be 5000 634.1 dollars in part C. Time given to us is eight years. So Mount will be quit of 4000 into one plus 0.575 the word by four whole days before in tow. Eight. So this is $6315.6.

Mohamed Mohamed · Answer

Oh, good. So this is a compound interest problem. So we write down everything you have, so we have a principle is equal to 4000 others on our interest rates are sequel to 0.5 75. Our end is equal to ah, Companion Quarterly&#x27;s and four times a year. And, uh, we are going to be given our different values, and we want to find the amount. So using the compound interest formula, you can say that the amount of T is equal to the principal 1000 plus interest rate, which is your +05 75 over end, which is for tire weighs +24 times. So I, uh, the forest violet would go to be given his t is equal to for And so we were basically going to do is plug in t uh, to this compound interest formula here constructed. And I should give us the amount uh, a off for Okay, I&#x27;m not gonna write down all the steps, but you&#x27;re gonna use a calculator to just plug in a set off t just braggin whatever body were given here. We have four we&#x27;re going to buy them for and we should get something approximately close to, uh, 5026 and 16 cents. Okay, so that&#x27;s the force I value. And then the 2nd 1 b we have given that T is equal to ask six of six years. And so a of six instead of ta Bly gets six, and it should be approximately equal to, uh, 5634 dollars intestines. And see, I was given T is equal to eight. Eso es off. Eight years we have approximately were accidentally ah, $6315.58. Okay, so these are the values for a the and okay, that&#x27;s all.

Stark Ledbetter · Answer

All right, so this problem you&#x27;ve got $1000. Um You&#x27;ve got an account paying an interest of 5.5% which is fantastic. This must be like the mid nineties or something. Uh And then you&#x27;ve got your money in there for eight years. Um So the first thing it asks is what happens if your money is compounded annually? Um Okay well that&#x27;s great. You have $1,000 every year you have an interest of 5.5%. So you&#x27;re adding 5.5%. Um 5.5% is really .055. That&#x27;s the the portion of the original it is right? Um and you get to keep your original, you get to add that in addition. So every year you&#x27;re multiplying by 1.055. So this is what happens after one year You&#x27;re multiplying by that. So after one year you&#x27;ve made $55. Not bad for putting $1,000, nowhere will give you that anymore. Um And you just do that for eight years because after your second year you now have this much, you multiply by that again. And so if you multiply eight times you get that. Um And then it&#x27;s money so you probably actually want to know what it is. So you put this into your calculator always make sure your calculators handing handling parentheses correctly when you type. Um and that&#x27;s going to be a rounded to the nearest sent uh 1534 dollars and 69 cents. That&#x27;s fantastic. I leave $1000 in a bank account for eight years. I get An extra 500 and something dollars. I don&#x27;t have to do anything risky like invest in stocks or Cryptocurrency or any other crazy stuff going on now? Okay so uh great. What happens if it&#x27;s compounded continuously? That&#x27;s actually even better compound and continuously is back? Okay so what does it mean to compound? Not annually. This is really weird. It shouldn&#x27;t work this way but it does. Okay so what we currently did for compounding annually was one plus 0.055. Right let&#x27;s say if it were compounded um I&#x27;m gonna go off to the side and do monthly if I were compounded monthly. What thanks do is they take instead of just multiplying by that for the year, You do 1/12 of that and you do that every month. So you&#x27;re actually getting an interest rate of better than 5.5%. I&#x27;m just gonna go ahead and calculate that. Remember we said we got $55 per year? Um Go ahead and calculate What that is monthly .055 divided by 12. And again I&#x27;m sorry I can&#x27;t show you my calculator but just make sure when you do it um You&#x27;re doing uh you&#x27;re putting your decimals incorrectly. So this is actually 1,056 $41 if they rounded to the nearest sent your bank may round down which is uh Oh very slightly mean to you but that&#x27;s ok, Okay, so compounding monthly over the year, you do very slightly better. Um Okay, and then um you know monthly is better. Uh some places might do weekly, probably not monthly and annually or are the most popular and then like you could maybe do daily. So like here weekly you would divide by 52 and raise the power of 52 daily, you would divide by 365, raise the power of 365, Maybe 3 66 days a week, you&#x27;re probably not, your bank is probably gonna chip you. Um So continuously means like, okay, daily is not the smallest thing, right? You could compound every hour, you can compound every minute, compound every second. You could just keep compounding all the time. So this what happens here and this is why this is in your calculus class, we take the limit as n gets large and what we&#x27;re doing is this exact same thing, We&#x27;re doing one plus your interest rate divided by as many things as possible. Basically raised to that power. Okay, now we know that the limit, this is this is one of the ways E came about. I don&#x27;t know if it was the first one but one plus right? X over. And to the end is either the X. That&#x27;s your calculus fact that you&#x27;re going to use. So then this limit must be um so this part is going to be easy to the .055. So this is going to be 1000 and this is for one year, Right? For eight years it would be one year because up here we were doing one year. If we were doing um a years there will be an A. Here. so it would be 12 times eight years. So actually let&#x27;s put that in open A. N. For eight years. 1000 times. And this is now E. To the A. time. Okay. And then in our case a equals eight. So we get 1000 Times E. to the 0.055 times eight. And let&#x27;s see how much better that does than continuously. So let&#x27;s see 1000 times Apologize. You can&#x27;t see this calculator again. 0.055 times eight. Um Okay, that&#x27;s approximately $1,552.71. Let&#x27;s just look back for a second. Okay so um compounding annually to compounding continuously, You&#x27;ve made a free $18. That&#x27;s nice

Liuxi Sun · Answer

problem, Gloria borrows $400. Um, simple interest. 8% $20. A percent simple interest. And she borrows is for 18 months. So 1.5 years, 1.5 years and party, we&#x27;re gonna find how much interest is Gloria have to pay. So 400 times in decimal percent of this one point of 0.88% decimal form and multiplied by 1.5 years uses per year. So 400 times a 0.8 times 1.5 is equal to is equal to $48 so $48 interest on part B, the total. Now she has a payback. Including interest is 400. She has paid a full amount back, plus 40 age, just equal to $448. Was the answer to heart be

Ankit Gupta · Answer

now, according to their constantly to support, their ex is invested or ex is looming. It wasn&#x27;t. We don&#x27;t just on why is lonely? 18%. It has mentioned that total amount is 12,000. So express where you can. I just told him that means why is he going to 12,000 minus X for now Here, the total interest is in just weaken like this. I don&#x27;t know. So that means according to the common A equals B R t. Here we go on like this, 1000 is equal to x amount invested at 8%. So x divided by 100. And this is for one years old. My replied with one we Can I leave it? Take this also. Why my complied with it insulated by 100. So nearly consumed this under the left and saying beginning 15 times You do it, Dex. In place of I will call to 12,000 minor sex. No, this is one slip. Do it. And here my dip levitating. So this is 18. Meditate. 12 district united to 16000 minus Get me next darkness All the next day, people. Right here. We&#x27;ll set this on the left hand side. So this is 100000 minus two on six. Digger 00 And this is minus 10 X. So this is minus 11600 did off. And in the next difficult idea, rest equal to minus 10 X. So here we can cancel this. So that means X is equal and we can cancel zero and you re late dollar 11,600 is invested, ruined and listen.

Problem 7 Easy Difficulty

Lime Co. incurs a $\$ 4,000$ note with equal principal installment payments due for the next eight years. What is the amount of the current portion of the noncurrent note payable due in the second year?
A. $\$ 800$
B. $\$ 1,000$
C. $\$ 500$
D. nothing, since this is a noncurrent note payable

Answer

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Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting

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Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon CooperPrinciples of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting