Final answer:
The question relates to a finance topic in business where the Thompson company acquires a building through a one-year loan. To calculate monthly payments or future values of payments, one would use specific financial formulas that incorporate principal amounts, interest rates, and loan terms.
Step-by-step explanation:
The question posed pertains to the topic of finance, specifically concerning a business transaction involving the acquisition of a building by Thompson company in exchange for a one-year loan. To answer similar questions, one needs to consider the principal amount borrowed, the interest rate of the loan, and the loan term. Usually, the monthly payment calculation is determined by using an amortization formula that includes these variables.
For example, to calculate the monthly payment for a $1,000,000 house loan over 30 years at a nominal interest rate of 6% convertible monthly, you would use the formula:
The monthly payment = Principal x [interest rate / (1 - (1 + interest rate)^(-number of payments))]
Where the interest rate is expressed as a monthly rate (annual rate divided by 12).
Similarly, when assessing future value of payments, the formula used is:
Future value = Payment x (1 + interest rate)number of years t
This formula helps in understanding the value of different payments received at various times in the future when analyzing cash flow for a business.