<u>Answer:</u>
Economic growth is an expansion in the creation of goods and enterprises over a particular period. Precisely, the estimation must expel the impacts of inflation. Profitability gains have additionally driven economic development. That estimates how much every hour of worker time delivers in yield. It is a free-advertise economy that empowers mechanical events.
A country's national bank can likewise spike development with money related strategy. It can build the cash supply by lower loan costs.
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Answer:
a. It will take her 5 years to pay for her wardrobe
b. She should shop for a new card once she is done paying for this one.
c. She should shop for a new card after finishing paying for this card since going further into debt with the current card would be a bad idea. This is due to the fact that an annual interest rate of 16% is very high. The best option would therefor to finish her payments on the credit card, then shop for a new card with a lower annual interest rate.
Explanation:
Use the formula below to determine the number of months it would take Rachel to pay off her debt;
C *{1-(1+r)^(-n×t)}/(r/n)=PV
where;
C=annuity
r=annual interest rate
n=number of compounding periods in a year
t=number of years
PV=present value
In our case;
PV=$10,574
C=$260
r=16%=16/100=0.16
n=12
t=unknown
replacing;
260*{1-(1+0.16/12)^(-12×t)}/(0.16/12)=10,574
1-(1+0.16/12)^(-12×t)={10,574×(0.16/12)}/260
1-{1.013^(-12 t)}=0.542
(1-0.542)=1.013^(-12 t)
ln 0.458=-12 t (ln 1.013)
t=-ln 0.458/12×ln 1.013
t=5
It will take her 5 years to pay for her wardrobe
b. She should shop for a new card once she is done paying for this one.
c. She should shop for a new card after finishing paying for this card since going further into debt with the current card would be a bad idea. This is due to the fact that an annual interest rate of 16% is very high. The best option would therefor to finish her payments on the credit card, then shop for a new card with a lower annual interest rate.
Solution :
a).
Amortization of the bonds premium semi annually = $ 250
Amortization of the bonds premium annually = 250 x 2
= $ 500
Bond premium = 500 x 10
= $ 5000
Par value bond = $100,000
Premium on the bonds = $ 6000
∴ Original price of the bonds = $ 106,000
b).
Original purchase price = $ 106,000
Semi annually periods from 1 Jan 20X5 to 31 Dec 20X7 = 3 yrs x 2 = 6 periods.
The premium amortization till 31st Dec, 20X7 = $ 250 x 6 = $1500
The balance of the bond investment account = $ 106,000 - $1500
= $ 104,500
c).
Event 1
Accounts Debit Credit
Bonds payable $100,000
Bonds premium (6000-1500) $4500
Interest income (5750 x 2) $ 11500
Investment in the Stallion Bonds $104,500
Interest expenses $ 11500
Event 2
Accounts Debit Credit
Interest payable $ 6000
Interest receivable $6000
Thomas should get a job and save every pay check he gets and then in a few years he would have to sit his self down and think about the pros and cons of the car he wants.
