Compute the Missing Amount for Each of the Following Notes

question 52

Essay

Compute the missing amount for each of the following notes: $\begin{array} { c c c c c } & \text { Principal } & \text { Annual Interest Rate } & \text { Time } & \text { Total Interest } \\\hline \text { (a) } & \$ 40,000 & 10 \% & 2.5 \text { years } & ? \\\hline \text { (b) } & \$ 120,000 & ? & 9 \text { months } & \$ 7,200 \\\hline \text { (c) } & ? & 10 \% & 90 \text { days } & \$ 1,500 \\\hline \text { (d) } & \$ 40,000 & 9 \% & ? & \$ 1,200 \\\hline\end{array}$

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Definitions:

Internal Rate Return

A financial metric used to evaluate the profitability of investments, representing the discount rate that makes the net present value of all future cash flows equal to zero in a different phrasing.

Cash Flows

The collective amount of cash inflow and outflow within a company, significantly determining its liquid resources.

Project Cost

The total expenditure, including all applicable fees and charges, needed to complete a project.

Payback Period

The length of time needed to recoup the initial cost of an investment, measuring the time it takes for an investment to become profitable.