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IrinaK [193]
3 years ago
11

Dan Dayle started a business by issuing an $80,000 face value note to First State Bank on January 1, 2018. The note had an 8 per

cent annual rate of interest and a five-year term. Payments of $20,037 are to be made each December 31 for five years. Required What portion of the December 31, 2018, payment is applied to interest expense and principal? What is the principal balance on January 1, 2019? What portion of the December 31, 2019, payment is applied to interest expense and principal?
Business
1 answer:
slavikrds [6]3 years ago
3 0

Answer:

Explanation:

The interest expense would be

= Borrowing amount × annual rate of interest

= $80,000 × 8%

= $6,400

And, the principal would be

= Annual payment - interest expense

= $20,037 - $6,400

= $13,637

The principal balance on January 1, 2019 would be

= Borrowed amount - principal repaid amount

= $80,000 - $13,637

= $66,363

The interest expense would be

= Borrowing amount of 2019 × annual rate of interest

= $66,363 × 8%

= $5,309

And, the principal would be

= Annual payment - interest expense

= $20,037 - $5,309

= $14,728

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The correct answer here is option D.

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7 0
1 year ago
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Your broker requires an initial margin of $878 per futures contract on wheat and a maintenance margin of $650 per contract. Whea
Shkiper50 [21]

Answer:

b. Call for $1,500

Explanation:

According to the scenario, computation of the given data are as follow:-

We can calculate the amount of margin call by using following formula:-

Loss of today = future contracts based total bushels × total contract × (settlement cost per bushels - future contract price per bushels)

= 5,000 cents × 6 × (390 cents  - 385 cents)

= 5,000 cents × 6 × 5 cents

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And we know that

100 cents = 1 dollar

so,

150,000 cents ÷ 100 =$1,500

Initial margin $878 per future contract and maintenance margin $650 per contract, Margins of both are less than loss .So we have to pay $1,500 in initial margin.

According to the analysis, we will receive $1,500 margin call.

Therefore option (B) call for $1,500 is correct.  

8 0
3 years ago
You are choosing between these four investments and you want to be​ 95% certain that you do not lose more than 8.00 % on your in
MakcuM [25]

Answer:

option B

Explanation:

In other to know how return fluctuation can be predicted with for instance, x%, predictability, one has to look at the normal distribution curve of return (average returns) to standard deviation of those returns. (check the attached file for additional details).

Hence, to be 95% sure that investment losses are less than 8% one needs to look at 95% of all returns which infact Mean return plos or minus 20. If the lower bound of this interval is less than 8% then the investment needs to be selected

check attached file for additional details

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