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Cloud [144]
3 years ago
11

You want to buy a car, and a local bank will lend you $25,000. The loan will be fully amortized over 5 years (60 months), and th

e nominal interest rate will be 4% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR? Do not round intermediate calculations. Round your answer for the monthly loan payment to the nearest cent and for EAR to two decimal places.
Business
1 answer:
Vikentia [17]3 years ago
8 0

Answer:

Monthly payment: 460.41 dollars

Effective rate:  4.07%

Explanation:

we will calculate the PTM of an annuity of 25,000 over 5 year at 4%

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV  $25,000.00

time 60

rate 0.003333333

25000 \div \frac{1-(1+0.003333)^{-60} }{0.003333} = C\\

C  $ 460.413

Now we need to know the effective rate, which is the same as 4% compounding monthly:

(1+0.04/12)^{60} = (1+ r_e)^{5}\\r_e = \sqrt[5]{(1+0.04/12)^{60}} - 1

effective  rate = 0.040741543 = 4.07%

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What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount
UkoKoshka [18]

Answer:

.d. The equilibrium quantity would increase, and the effect on equilibrium price would be ambiguous.

Explanation:

The use of the machine would increase the supply of lattes and price falls. The supply curve would shift to the right. If scientists discover that coffees reduce heart attack, the demand for coffee would increase and price would increase. The demand curve would shift to the right.

The combined effect would be a rise in equilibrium quantity and an indeterminate effect on equilibrium price.

I hope my answer helps you

7 0
3 years ago
Consider the following scenarios:
Oliga [24]
Scenario 2 would be correct
7 0
3 years ago
The original cost of a LIFO inventory item is below both replacement cost and net realizable value. The net realizable value les
serg [7]

Answer:

D. Original cost.

Explanation:

As we know that the inventory should be valued at lower of cost or market value. Also , the market value is the middle amount among the replacement cost, net realizable value, net realizable value - normal profit margin

It can be the replacement cost or net realizable value. We don't have an idea which one is the middle amount

Also, if the original cost is less than the market cost so we assume that the inventory should be valued at original cost

4 0
3 years ago
Central banks are responsible for the collection and the replacement of currency from circulation.
Dmitriy789 [7]

Answer:

The correct answer is letter "A": True.

Explanation:

Central banks are the financial institutions in charge of the monetary policy of their country on behalf of the central government. They regulate the money supply and the interest rates to maintain a country's economy the closest to its equilibrium level. In the United States, the central bank is the Federal Reserve (<em>Fed</em>). Central banks also collect and replace the currency in circulation.

4 0
3 years ago
Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of b
OlgaM077 [116]

Answer:

$14,837

Explanation:

Calculation for what The adjusted cash balance should be

Bank balance$14,237

Add Deposit in transit$4,500

Less Outstanding checks ($3,900)

Adjusted bank balance$14,837

($14,237+$4,500-$3,900)

Book balance$13,162

Less Bank service fees ($50)

Add Note collected $1,725

Adjusted book balance$14,837

($13,162-$50+$1,725)

Therefore The adjusted cash balance should be:

$14,837

8 0
3 years ago
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