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Natali5045456 [20]
3 years ago
15

You want to buy a car, and a local bank will lend you $20,000. The loan will be fully amortized over 5 years (60 months), and th

e nominal interest rate will be 10% with interest paid monthly.
1. What will be the monthly loan payment?

2. What will be the loan's EAR?
Business
1 answer:
EastWind [94]3 years ago
7 0
Amortizing a loan P over n periods at i% interest / period, the payment per period is given by:
A= P(i(1+i)^n)/((1+i)^n-1)

In given situation,
P=20000
period=month
i=10%/12
n=5*12=60 months

A.  monthly payment amount
A= P(i(1+i)^n)/((1+i)^n-1)
= 20000(.1/12(1+.1/12)^60)/((1+.1/12)^60-1)
=424.98 to the nearest cent

B. EAR (effective annual rate)
the APR is 10%, but compounded monthly.
So 
EAR=(1+i/12)^12-1
=(1+0.1/12)^12-1
=0.104713
=10.4713%  (effective annual rate)

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Answer:

b. adjusting the discount rate.

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How would the issuance of common stock for cash affect the accounting​ equation?
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Answer:

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9-10. Armstrong Inc. is a calendar-year corporation. Its financial statements for the years ended 12/31/14 and 12/31/15 containe
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Consider the following explanation

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5 0
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Henry bakes loaves of bread, which he sells for $4 each. He is considering purchasing additional mixers (capital) for his bakery
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Explanation:

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Marginal product = \frac{Change\ in\ Total\ Product}{Change\ in\ Capital}

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By using these formulas, I have completed the following table:

6 0
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At December 31, 2019, Blanda Company had a credit balance of $15,000 in Allowance for Doubtful Accounts. During 2020, Blanda wro
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Answer:

journal entries

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Recovery

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Debit Allowance for doubtful debt Adjustment $4,000 Credit Allowance for doubtful debt $4,000

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Since the amount has been written off as bad, when it is recovered it is no longer recognized as a payment on accounts receivable but an income the entity thought was lost.

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