Answer:
Calculate the true APR:
It is given that the compounding period is 12 as the payment is done monthly. The total loan amount is $1,000 with $100 monthly installments at an interest rate of 20%. Annuity is a stream of cash flows that continues for a given number of years. The interest rate is calculated by following method. Use the following formula to calculate the present value:
Where,
c —) Monthly payment
r —> Interest rate
t —> Compounding period
Now,
![1000 = 100[\frac{1}{r}-\frac{1}{r(1+r)^{12} }]](https://tex.z-dn.net/?f=1000%20%3D%20100%5B%5Cfrac%7B1%7D%7Br%7D-%5Cfrac%7B1%7D%7Br%281%2Br%29%5E%7B12%7D%20%7D%5D)
We cannot determine the exact value of interest of annuity. Using the trial and error method we can determine the interest rate. We can use the TVM (time value of money) keys in the financial calculator to calculate the value of 'r' as below:
Enter
N = 12
PV = -1000
PMT =100
FV = 0
Now press i and we should find that the monthly rate for this annuity(r) is 2.923% per month.
Effective interest rate is the annualized interest rate using compound interest. Multiply the monthly rate by 12 to obtain APR as below:
APR = Monthly rate x 12
Substitute the values in the formula:
APR = 2.923% x 12
APR = 35.076%
Hence, the APR is 35.076%.
Determine the effective annual rate (EAR):
It is the net annual return received. The monthly rate should be used to calculate the effective annual rate with the help of the formula below:



Effective annual rate = 0.41302 or 41.302 %
Hence, the effective annual rate is 41.302%.
Finally we may conclude that the true rate would be 20%, if $1,000 was borrowed today and $1,200 was paid back one year from today. It should be noted that the true rate must be greater than 20% because the twelve annual payment of $100 should be made before the end of the year.
Labor, privacy, and health
Answer:
5,500 units
Explanation:
The computation is shown below:
Given that
Need to sell the units in a month = 4,000 units
Beginning inventory = 1,000 units
Desired ending inventory = 2,500 units
So, by considering the above information, the units to be produced is
= Desired ending inventory + need to sell the units in a month - beginning inventory
= 2,500 units + 4,000 units - 1,000 units
= 5,500 units
Answer:
Netflix
Explanation:
Netflix is a company that uses streaming service where viewers can watch varieties of documentaries, popular films etc on their network . This type of service enables users to access latest films, TV shows, offered by Netflix over the internet. Although users get to watch and enjoy these services through a paid subscription, there are quite unlimited films that can be watched and downloaded for offline viewing.
Unlike a conventional method where people can watch and download films, documentaries online, Netflix provides a platform that warehouses collections of films, documentaries, TV shows hence revamp the business methods of renting movies.
Answer:
Gain from sale = $23,067
Explanation:
the none interest bearing note must be recorded at present value:
present value of the note = face value / (1 + r)ⁿ
- face value = $253,240
- r = 11%
- n = 3
PV = $253,240 / (1 + 11%)³ = $185,167
the note receivable must be recorded at $253,240, but $68,073 will be recorded as interest revenue.
the journal entry for the transaction should be:
January 1, 2020, sale of a building:
Dr Notes receivable 253,240
Dr Accumulated depreciation 101,140
Cr Building 263,240
Cr Interest revenue 68,073
Cr Gain from sale 23,067