FAR 5 - M3 LONG TERM LIABILITIES Flashcards
1
Q
computation of effective interest rate
A
100% face of n/p - loan orig fee upfront
100% face of n/p - .5% loan orig fee upfront
= 12.563% effective int rate
2
Q
computation of future amount
or accumulated earnings in xx years
A
investment Y1 = 10000
PV Y1 = .909
PV Y2 = .826
PV Y3 = .751
find accum earnings in 2 years
PV = Future amount x PV factor
10000 = x + .826
Future amt = 10000/.826
= 12107
