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marishachu [46]
3 years ago
15

ames Sprater of Grand Junction, Colorado, has been shopping for a loan to buy a used car. He wants to borrow $18,000 for four or

five years. James' credit union offers a declining-balance loan at 9.25 percent for 48 months, resulting in a monthly payment of $450.07. The credit union does not offer five-year auto loans for amounts less than $20,000, however. If James borrowed $18,000, this payment would strain his budget. A local bank offered current depositors a five-year loan at a 9.34 percent APR, with a monthly payment of $376.62. This credit would not be a declining-balance loan. Because James is not a depositor in the bank, he would also be charged a $25 credit check fee and a $50 application fee. James likes the lower payment but knows that the APR is the true cost of credit, so he decided to confirm the APRs for both loans before making his decision. Round your answers to two decimal places.
Business
1 answer:
Ghella [55]3 years ago
4 0

Answer:

James' credit union loan rate is 8.88% APR, the local bank loan rate is 9.34% APR.

Explanation:

Hi, since in both cases payments would be done in a monthly basis, we have to assume that the rate that we are looking for is APR (compounded monthly), and since there is no additional information in regards that 9.25% rate, we can assume that this is effective annually, so let´s convert this effective monthly rate into APR (compounded monthly)

First, we have to convert it into an effective monthly rate, that is:

r(month)=((1+r(annual))^{\frac{1}{12} } -1)

r(month)=((1+0.0925)^{\frac{1}{12} } -1)=0.00739963

Then we multiply by 12 and we get  0,088796 , which is 8.88% APR (compounded monthly)

This way James can compare both credits. The cheaper loan is from the credit union.

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Answer:

A production combination outside of the PPF is unattainable by the economy with the given resources and technology.

This represents the Concept of scarcity in economics.

If the economy wishes to achieve the production point outside the frontier, they will have to enhance the production possibility capacity by introducing new technology or finding new resources.

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3 years ago
Bermuda Cruises issues only common stock and coupon bonds. The firm has a debt–equity ratio of .75. The cost of equity is 11.6 p
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Answer:

the capital structure weight of the firm's equity will be 57.14 %.

Explanation:

Weighted Average Cost of Capital is the return that is required by the providers of long term sources of finance.

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3 years ago
Companies increasingly strive to achieve the ______ performance when formulating their corporate strategy.
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Did you ask this for Edmentum? lol I'm doing the same tutorial.
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Revenue refers to the overall income a company generates via its center operations like sales of services or products, rents on a property, routine payments, interest on borrowings, and so on. sales calculations come earlier than doing away with any fees, together with discounts and returns.

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