All categories

3 years ago

Some banks offer variable rate loans with defined periods. Give at least one example

Business

1 answer:

o-na [289]3 years ago

3 0

Answer:

A variable rate loan is a loan that has a benchmark or index rate, plus or less some points, and varies according to the index rate.

For example, one of the most common index rate is the LIBOR, acronym for Londor Interbank Offered Rate. A bank can offered a loan consisting of a rate of LIBOR plus 1.5 points.

Suppose the first month of the loan, LIBOR is 2.00%, therefore, the total variable rate of the loan is 3.15%. Then, in the second month, LIBOR goes down to 1.00%, therefore, now the variable rate of the loan is 2.15%. This is an example of a variable rate loan.

You might be interested in

Refer to lynn bernerd, inc. initially, the managers believed that ____ would be the best option for entering the foreign market.

mojhsa [17]

<span>They originally felt that licensing would be the best first step. By letting other companies use their product in exchange for paying royalty fees, Bernerd was licensing its product out for those companies to take advantage of the company's name.</span>

7 0

2 years ago

Regarding competitive strategies, companies seek efficient manufacturing and productive employees to achieve ___________.

hoa [83]

Answer:

D. differentiation.

Explanation:

Option A - Low-cost leadership refers to the strategy in which the customers are getting the products at a low cost. Companies seek to achieve cost leadership, but with efficient manufacturing and productive employees cannot help them to achieve that.

Options B and C - With local employees, it is challenging to achieve global operation, and focused differentiation is the selling of unique products to the customers. So, those are wrong answers.

Option D - With the help of differentiation strategy, companies seek effective manufacturing and productive employees to attract customers to take their products from the thousands of products in the market. Therefore, it is the correct answer.

8 0

3 years ago

How is a savings account most useful

valentinak56 [21]

For using $money$ in the near future but not right away.

5 0

2 years ago

Read 2 more answers

The ledger of Oriole Company on July 31, 2017, includes the selected accounts below before adjusting entries have been.

Katarina [22]

Answer:

July 31 Dr. Cr.

1. Interest Receivable $220

Interest Income $220

2. Cost of Goods Sold $4,100

Supplies $4,100

3. Rent Expense $1,050

Prepaid Rent $1,050

4. Salaries and Wages Expense $3,500

Salaries and Wages Payable $3.500

5. Depreciation $470

Accumulated Depreciation $470

6. Unearned Service Revenue $4,850

Serivce Revenue $4,850

7. Maintainance & repair Exp. $2,150

Maintainance & repair Payable $2,150

Explanation:

Interest Income from Note receivable = $22,000 x 12% x 1/12 = 220

Reduction in supllies will be adjusted in Cost of Goods Sold by $4,100 ( $22,500 - $18,400 ).

Monthly rent accrues = 4,200 / 4 = $1,050

Unpaid salaried are recorded as the Salaries and Wages Payable of $3,500

Depreciation per month = $5,640 / 12 = $470

Service revenue will b recognized and balance is transferred from unearned revenue to service revenue.

Maintenance and repair costs is recorded as as the maintenance and repair payable by $2,150.

4 0

3 years ago

A man aged 40 wishes to accumulate a fund for retirement by depositing $1,000 at the beginning of each year for 25 years. Strati

Firdavs [7]

Answer:

The man will made 15 drawins for 31,468 at their retirement age.

Explanation:

We solve for the future value of the annuity-due (deposits at the beginning)

$C \times \frac{(1+r)^{time} -1}{rate}(1+r) = FV\\$

C 1,000.00

time 25

rate 0.04

$1000 \times \frac{(1+0.04)^{-25} -1}{0.04}(1+0.04) = PV\\$

FV $375.1168

Now, we calcualte the amount of the withdrawals considering the new rate:

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

$375.116802253964 \div \frac{1-(1+0.035)^{-15} }{0.035}(1+0.035) = C\\$

C $ 31.468

7 0

3 years ago