Classify the following company's strategy as price or nonprice competition.

A borrower takes out a 30-year adjustable rate mortgage loan for $200,000 with monthly payments. The first two years of the loan

lara31 [8.8K]

Answer:

1003

Explanation:

Given:

Period= 30 years, Loan amount= $200,000,

Payments- Monthly,

Teaser rate for first 2 years = 4%,

Annual payment cap=5%, Composite rate on reset date= 6%

Annual rate for 2 years =4%

Monthly rate will be 4/12 = 0.3333% = 0.003333

n=30years=360 months

Monthly payment for first 2 years = $Pr(1+r)^n/((1+r)^n-1)$

= $200000\times0.0033\times1.033^{360}/(1.033^{360}-1)$

= 954.83

or by Excel function = PMT(0.003333,360,200000,0) = 954.83

Loan balance after 2 years = PV(0.003333,336,-954.83,0) = 192,812.36 or

Balance= $A(1+r)^n-PMT\times(1+r)^n-1)/i$

= $200000(1.0033)^{24}-954.83(1+0.003333)^{24}-1)/0.003333$

= 192,812.36

Composite rate is 6% but payment is capped at 5%. So new payment from year 3 is 954.83×1.05=1002.57=1003

6 0

3 years ago

An animator needs a laptop for audio/video editing, and notices that he can pay $2600 for a Dell XPS laptop, or lease from the m

Goshia [24]

Answer:

Cost of leasing over buying is $144.59

Explanation:

For computing the cost of leasing the laptop over buying it outright, we have to calculate the present value is shown below:

Given that,

Future value = $0

Rate of interest = 14% ÷ 12 months = 1.17%

NPER = 4 years × 12 month = 48 months

PMT = $75

The formula is shown below:

= PV(Rate;NPER;-PMT;FV;type)

So, after solving this, the present value is $2,744.59

And, the buying amount is $2,600

So, the difference is

= $2,744.59 - $2,600

= $144.59

3 0

3 years ago

What is a marketing strategy in which the focus is on small but profitable market segments?

Goryan [66]

Niche marketing strategy is a marketing strategy in which the focus is on small but profitable market segments.

Niche marketing is defined as the strategy of channelizing all the marketing efforts towards one well-defined segment of the population. There is one important thing to understand that ‘niche’ does not exist, but it is created by a smart marketing technique and identifying what the customer wants.

This can be done if the company knows what the customer needs and then tries to deliver a better solution to a problem which was not presented by other firms. A niche market does not mean a small market, but it involves specific target audience with a specialized offering.

To know more about niche marketing here:

brainly.com/question/27940470

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3 0

2 years ago

Conditions of confinement lawsuits often allege what?

sergeinik [125]

They allege that officials have deprived inmates of their constitutional rights

8 0

3 years ago

A business cycle reflects changes in economic activity, particularly real gdp. the stages of a business cycle are?

Lostsunrise [7]

The business cycle goes through four major phases: expansion, peak, contraction, and trough.

A business is an activity that makes a living or makes money by manufacturing or buying and selling products.

Enterprise is defined as an organization or business entity engaged in commercial, industrial, or professional activities. A business can be a commercial or non-commercial organization. The types range from corporations with limited liability to sole proprietorships, corporations and partnerships.

The definition of business is the profession or trade, the buying and selling of goods or services for profit. A business example is agriculture. An example of a transaction is the sale of a home.

Learn more about business here:brainly.com/question/24553900
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8 0

2 years ago