Examples of how percents are used in business

You are looking at a one-year loan of $12,000. The interest rate is quoted as 8.4 percent plus two points. A point on a loan is

Debora [2.8K]

Answer:

Explanation:

Mortgage rates are influenced by many different factors including demand from homebuyers and homeowners for new loans, current economic conditions, inflation, and demand from investors to buy mortgage loan debt

Mortgage interest rates have a very significant impact on the overall long-term cost of purchasing a home through financing. On the one hand, mortgage borrowers are seeking the lowest possible rates; on the other, mortgage lenders must manage their risk through the interest rates they charge. The lowest mortgage interest rates are only available to borrowers with the most solid finances and stellar credit histories.

While the financial health of borrowers affects how good an interest rate they can get, larger economic factors and government financial policy affect the whole mortgage rate universe. You can boil it down to these five important factors. All represent basic rules of supply and demand in one form or another. It's a little technical, but learning these principles will give you a good way to think about what you're paying now and what could be coming

Answer a.

Effective Annual Rate of a loan is 8.92%

Answer b.

Effective Annual rate R is 12.27%

Answer is not affected by Loan amount as certain percentage of loan that is deducted as points.

Explanation:

Answer a

Points deducted = 2 or 2%

April = 8.4%

Monthly rate (i)= 8.4%/12= 0.007

Months in a year = 12

Effective Annual Rate of a loan =( (1+(i/(1-points)))^months in year)-1

((1+(0.007/(1-2%)))^12)-1

=0.08916311096 or 8.92%

So Effective Annual Rate of loan is 8.92%

Answer b

quoted interest rate = 11.4%

Monthly rate (i)= 11.4%/12=0.0095

Months in year = 12

points deducted= 2 or 2%

EAR of loan =((1+(i/(1-points))) ^months in year)-1

((1+(0.0095/ (1-2%))) ^12)-1

=0.1227334817 or 12.27%

Answer is not affected by Loan amount as certain % of loan is deducted as points.

5 0

3 years ago

In which core leader competency do you determine information sharing strategies?

Andre45 [30]

Communication is the core leader competency in which you determine information sharing strategies.
Through communication, a leader could convey the goals of the organizations and motivate all members of the group to give their best in order to achieve those goals

4 0

3 years ago

Honeycutt Co. is comparing two different capital structures. Plan I would result in 12,700 shares of stock and $109,250 in debt.

irina [24]

Answer: $47.50

Explanation:

The Price per share under Plan I can be calculated by the formula;

Price per share = Value of debt / (Number of shares under all-equity plan - Number of shares under Plan)

= 109,250 / ( 15,000 - 12,700)

= 109,250 / 2,300

= $47.50

5 0

3 years ago

_______________ refers to the broad set of activities carried out by organizations to analyze sourcing opportunities, develop

Solnce55 [7]

Answer:

Supply Management

Explanation:

Supply Management -

As the name suggests , it is the management of the supply , it is also known as procurement .

In a business or company , the method to determine and manage the resources and the suppliers which are required for the business , is referred to as supply management .

The focus of the people working in the supply management is -

cost control , collecting data and information , risk management etc.

Hence , from the given information of the question ,

The correct answer is supply management .

7 0

3 years ago

Information pertaining to Noskey Corporation’s sales revenue follows: Nov 2018 (Actual) Dec 2018 (Budgeted) Jan 2019 (Budgeted)

Pani-rosa [81]

Answer:

1) Budgeted cash collections for December 2018 from November 2018 Sales - $ 100,320

2) Budgeted total cash collections for January 2019 - $ 221,880

3) Budgeted total cash payments for December 2018 - $ 135,420

Explanation:

Computation of cash collections for December 2018 from November 2018

Credit Sales for November 2018 $ 264,000

Less: Uncollectible sales - 5 % of credit sales $ ( 13,200)

Collectible sales $ 250,800

Percentage of collectible sales in month of sales- 60 % $ (150,480)

Percentage of collectible sales in next month -Dec 18 - 40 % $ 100.320

Computation of total cash collections for January 2019

Cash collections from December sales

Credit sales for December 2018 $ 388,000

Less 5 % Uncollectible sales $ ( 19,400)

Collectible sales $ 366,600

Collections in month subsequent to sale 40 % * $ 366,600 $ 147,400

Cash collections from Januray 2019 sales

Credit sales for Janaury 2019 $ 196,000

Less: 5 % uncollectible sales $( 9,800)

Collectible sales $ 186,200

Collections in month of sale 60 % * $ 186,200 $ 74,480

Total collections for January 2019 $ 221,880

Computation of cash payments for December 2018

Purchases for December 2018 sales - 30 % of $ 388,000 $ 116,400

Purchases for January 2019 sales - 70 % of $ 196,000 $ 137,200

Total purchases for December 2018 on selling price $ 253,600

Purchases are 60 % of selling price - $ 253,600 * 60 % $ 152,160

Payments for December purchases 25 % (A) $ 38,040

Purchases for November 2018 sales - 30 % of $ 264,000 $ 79,200

Purchases for December 2018 sales - 70 % of $ 388,000 $ 137,200

Total purchases for November 2018 on selling price $ 216,400

Purchases are 60 % of selling price - $ 216,400 * 60 % $ 129,840

Payments for November purchases 75 % (B) $ 97,380

Total payment for purchases in December 2018 (A) + (B) $ 135,420

3 0

3 years ago