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3 years ago

What does it mean to say that "banks create money"?

1 answer:

8 0

The process wereby banks make loans equal to amount of their excess recerves and create new checkbook money is known as multiple deposit creation each time a bank recieves a deposit it sets aside some of it to meet reserve requirements and may lend an amount equal to the remaing excess reserves

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Samantha put $18,500 into a savings account. after one month, the savings account grew to $18,962.50. after the second month, it

Readme [11.4K]

Answer: $24,747.92

Based on the given amounts of increased in savings for the first 3 months, we have the following assumptions:

1) That the savings increase by 2.44% monthly

$18,962.50 -18,500=462.50, 462.50/18962*100=2.44%

$19,436.56--$18,962.50=$474.06, 474.06/19,436.56*100=2.44%

$19,922.48-$19,436.56=485.92, 485.92/19,922.48*100=2.44%

2) That the monthly interest for the first 3 months had an incremental of $0.30 monthly

462.50,474.06 and 485.92 has an incremental of 11.56 and 11.86 (with a difference of .30)

Continuing on with the increments gives savings of $24,747.92 in the 12th month.

4 0

3 years ago

Read 2 more answers

If your uncle borrows $56,000 from the bank at 10 percent interest over the eight-year life of the loan. Use Appendix D for an a

Elan Coil [88]

Answer:

a. Annually equal instalment = Principal x rate x ( (1+rate)n / (1+rate)n -1 )

Explanation:

Accrding to the following formula, we calculate the anually equal instalment.

So, instalment = 56000 x 0.10 x ( (1.10)8 / (1.10)8 -1) = $10496.86498 ~ $10496.86

7 0

3 years ago

A method for selecting multiple lines of text is to _______.

antiseptic1488 [7]

The answer to this question is by clicking and draging in the white space to the left of the lines. In word processing, copying and selecting multiple lines is a technique that can help you work on your document faster. Also in word processing, the user can create, edits, and save the document.

4 0

3 years ago

Eisler Corporation issued 2,000 $1,000 bonds at 101. Each bond was issued with one detachable stock warrant. After issuance, the

Zolol [24]

Answer:

In the books of Eisler Corporation :

Cash ( 2,000 x 1,000 x 101 %) A/c Dr. 2,020,000

Discount on Bonds Payable A/c Dr. $59,216

To Bonds Payable 2,000,000

To Paid-in Capital : Stock Warrants 79,216

Workings:

Bond issue proceeds proportionately allocated to bonds:

$=2,020,000\times\frac{980}{980+40}$

= 1,940,784.31

Discount on bonds payable = $ 2,000,000 - $1,940,784

= $59,216

4 0

3 years ago

Selected information taken from the accounting records of Vigor Company follows:

MariettaO [177]

Answer and Explanation:

The computation is shown below:

But the following calculations must be done

Account receivable turnover = Net sales ÷ average account receivable

5 = Net sales ÷ ($900,000 + $1,000,000) ÷ 3

5 = Net sales ÷ $950,000

Now the net sales is

= $950,000 × 5

= $4,750,000

And,

Inventory turnover ratio = Cost of goods sold ÷ average of account receivable

4 = Cost of goods sold ÷ ($1,100,000 + $1,200,000) ÷ 3

4 = Cost of goods sold ÷ $1,150,000

Cost of goods sold

= $1,150,000 × 4

= $4,600,000

Now the gross profit is

a. The gross profit is

= Sales - cost of goods sold

= $4,750,000 - $4,600,000

= $150,000

2. The days sales outstanding in both the cases are as follows:

DSO in inventory

= 360 ÷ 4

= 90 days

And, DSO in account receivable

= 360 ÷ 5

= 72 days

7 0

2 years ago