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:
![Present value of annuity = c[\frac{1}{r}-\frac{1}{r(1+r)^{t} }]](https://tex.z-dn.net/?f=Present%20value%20of%20annuity%20%3D%20c%5B%5Cfrac%7B1%7D%7Br%7D-%5Cfrac%7B1%7D%7Br%281%2Br%29%5E%7Bt%7D%20%7D%5D)
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.
Answer:
D) or E) (are this the same?) 50 units of grain and 130 units of incense
Explanation:
Agland has an advantage producing Organic grain, and Zealand producing Incense, So:
If Agland specialices in producing organic grain it would produce with 20 workers 200 units of grain a year.
If Zealand specialices in producing Incense, it would produce with 10 workers 150 units of incense a year.
This gives a Total combined output of 200 units of grain and 150 unit of incense a year.
Given that the total current output of the two countries is 150 units of grain and 20 units of incense it would increase in 50 units of grain and 130 units of incense.
The answer is false i hope this helps :3
Answer:
4400 Unfavorable
Explanation:
Calculation to determine the labor rate variance for the month
First step is to calculate the Standard hours using this formula
Standard hours = Standard labor-hours per unit of output*Actual output
Let plug in the formula
Standard hours= 4.5*1,300 units
Standard hours= 5850
Now let calculate the Direct labor efficiency variance using this formula
Direct labor efficiency variance = (Standard hours - Actual hours)*Standard rate
Let plug in the formula
Direct labor efficiency variance= (5,850-6,100)*17.60
Direct labor efficiency variance= 4400 Unfavorable
Therefore the labor rate variance for the month is 4400 Unfavorable
Answer:
Total direct material variance= $1,000 favorable
Explanation:
Giving the following information:
Company had a favorable direct materials price variance of $3,000 and an unfavorable direct materials usage variance of $2,000.
<u>To calculate the total direct material variance, we need to use the following formula:</u>
<u></u>
Total direct material variance= price variance +/- quantity variance
Total direct material variance= 3,000 - 2,000
Total direct material variance= $1,000 favorable
