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1 year ago

What is the calculation used to determine the estimated annual interest amount a borrower will pay on a loan?

Business

1 answer:

PIT_PIT [208]1 year ago

7 0

The calculation used is mentioned as

$Annual\ Interest\ Amount\ =\frac{Loan\ balance\ X\ Interest\ Rate}{12}$ .

What is Annual Interest Amount?

An interest rate is written as an annual percentage rate. It factors in variables like monthly payments to determine what proportion of something like the principal you'll be paying yearly. APR is another term for the yearly rate of interest payable on investments that does not take into account the annual compounding of interest.
What you still owe just on mortgage principal is known as the loan balance. The loan balance is calculated as the difference here between initial mortgage balance and the sum of your principal payments. It's crucial to be aware of your loan's balance.
An interest rate indicates how expensive borrowing is or how lucrative saving is. Therefore, if you are a borrower, the interest rate refers to the amount you pay for borrowing money and is expressed as a percentage of the overall loan amount.

The calculation used is illustrated as :

$Annual\ Interest\ Amount\ =\frac{Loan\ balance\ X\ Interest\ Rate}{12}$

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Which type of market is the one in which a person buys their favorite breakfast sandwich at a fast-food drive thru? product mark

pogonyaev

The type of market is the one in which a person buys stock in type fast food company is Financial market.

What is Financial market?

Any location or system that gives buyers and sellers thew ability to trade financial assets such as bonds, shares, the various international currencies, and derivatives , is referred to as a financial market.

Why is financial market important?

Markets provide finance for companies so they can hire, invest and grow.
They provide money for the government to help it pay for new roads, schools and hospitals.
They can help lower the costs you face buying food at the super market, taking out a mortgage or saving for your retirement.

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4 0

1 year ago

A financial institution has entered into an interest rate swap with company X. Under the terms of the swap, it receives 10% per

sergij07 [2.7K]

Answer:

The loss of the financial institution is $413,000

Explanation:

Let's say that after 3 years the financial institution will receive:

0.5 * 10% of $10million

= 0.5 * 0.1 * 10000000

= $500,000

Then, they will pay 0.5 * 9% of $10M

= 0.5 * 0.09 * 10000000

= $450,000

Therefore, their immediate loss would be $500000 - $450000

= $50000.

Let's assume that forward rates are realized to value the rest of the swap.

The forward rates = 8% per annum.

Therefore, the remaining cash flows are assumed that floating payment is

0.5*0.08*10000000 =

$400,000

Received net payment would be:

500,000-400,000= $100,000. The total cost of default is therefore the cost of foregoing the following cash flows:

Year 3=$50,000

Year 3.5=$100,000

Year 4 = $100,000

Year 4.5= $100,000

Year 5 = $100,000

Discounting these cash flows to year 3 at 4% per six months, the cost of default would be $413,000

4 0

3 years ago

TRUE/FALSE if a student leaves a book bag in class by accident and the professor takes possession to safeguard the bag, a bailme

adoni [48]

if a student leaves a book bag in class by accident and the professor takes possession to safeguard the bag, a bailment has been formed-True

<h3>bailment</h3>

A bailment is a form of the legal relationship that focuses on the contractual transfer of assets or property from a bailor to a baile who voluntarily but temporarily gives up possession but not complete ownership. Even though no contract is formalized, a bailment is a type of contractual relationship. The person receiving the property (the "bailee") has custody and control over it for a certain amount of time, during which he or she is responsible for taking reasonable care of it.

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3 0

1 year ago

When budgeted and actual results are not the same amount, there is a budget

torisob [31]

Answer:

a) difference.

Explanation:

As we know the budget represents the difference between the expected and the actual results

So as per the given situation, in the case when the amount of the expected and the actual results are not same or similar so it should be the budget difference

hence, the option a is correct

And, the rest of the options are incorrect

7 0

3 years ago

Rob's wife, Marie, has a wage income of $250,000. They jointly sold stocks in 2019 and generated a long-term capital gain of $13

Kaylis [27]

Answer:

Explanation:

According to IR Many individuals, including owners of businesses operated through sole proprietorships, partnerships, S corporations, trusts and estates may be eligible for a qualified business income deduction, also called the section 199A deduction. Some trusts and estates may also claim the deduction directly.

The deduction allows them to deduct up to 20 percent of their qualified business income (QBI), plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. Income earned by a C corporation or by providing services as an employee isn't eligible for the deduction.

1. QBI component. This component of the deduction equals 20 percent of QBI from a domestic business operated as a sole proprietorship or through a partnership, S corporation, trust or estate. Depending on the taxpayer's taxable income, the QBI Component is subject to limitations including:

a. The type of trade or business,

b. The amount of W-2 wages paid by the qualified trade or business, and

c. The unadjusted basis immediately after acquisition (UBIA) of qualified property held by the trade or business.

These limitations do not apply to taxpayers with taxable income at or below a certain threshold. For 2018, the threshold amount is $315,000 for a married couple filing a joint return, and $157,500 for all other taxpayers.

STEPS ARE:

1. Original QBID = 154K*20% = 30,800

2. Wage/Cap. Investment limitation: a) wage limitation = 58K*50%= 29,000

b) wage/capital limit. = wage(58K*25%) +capital(300K*2.5%) =14,500+7,500=22K

We take the larger of them => 29K

3) Since original QBID is greater than wage limitation, we must use reduction ratio. In this case:

408K (taxable income) - 315K(threshold)/100,000 = 0.93

4) Now we subtract the wage limitation from original QBID (30,800 - 29,000) * 0.93= 1,674.

5) Finally, subtract that from original QBID 30,800-1,674=29,126.

29,126 their final QBID

4 0

2 years ago