1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
prisoha [69]
2 years ago
13

A loan of $300,000 is taken out which requires an annual interest payment of 4.6% of the borrowed amount of money (in market dol

lars). No principal payments are made, only interest is paid. Inflation is 2% per year. What will be the value of interest payment at the end of fourth year in real dollars
Business
1 answer:
Aleonysh [2.5K]2 years ago
4 0

Answer:

$13,800

Explanation:

Loan Payment  = $300,000

Annual Interest rate includes the real interest and inflation effect in it. As 2% is already included in the calculation of 4.6% so, we will charge 4.6% to the principal amount.

Interest Payment = $300,000 x 4.6% = $13,800

As the payment is made each year, so there is no compounding effect to the interest payment and Interest payment will remain constant every year. The value of Interest payment at the end of fourth year is $13,800.

You might be interested in
A borrower is unsure whether to go with a fixed rate or adjustable rate loan. what kind of questions would you ask to help them
katovenus [111]
I would ask them if they were comfortable with a fluctuating rate, which though at the moment is lower than the fixed rate, could go up in the future. I would also ask them if they needed to be sure of the rate say for example for a 5 year term like in a mortgage for peace of mind or if they are willing to take a risk with the fluctuations. If the latter, I would tell them that at any time they could lock it in for a 5 year term if they saw it going up. 
5 0
2 years ago
Greenbelt Construction has been a successful small home-building firm for years. The owner pays subcontractors slightly more tha
kipiarov [429]

Answer: Option (E)

Explanation:

Supply chain management is referred to as or known as broad/wide range of activities which are required in order to control, plan, and execute a commodity's flow, i.e. from the primary stage of acquiring raw material and thus production to the final stage of distribution to consumer, in most streamlined, efficient and effective way that is possible.

In other words it encompasses or encloses integrated execution and planning of a procedure which is required in order to optimize flow of the material, financial capital and information in areas which include sourcing, demand planning, production, storage and inventory management, logistics and also the return of defective products.

4 0
3 years ago
50 red and 50 black balls in a box when you randomly pick two balls without replacement
LUCKY_DIMON [66]
2/100
=1/50
.........
7 0
3 years ago
During the phase of the history of U.S. government regulation called industry deregulation, government sought to a. protect comp
Over [174]

Answer:

Option d (increase.....................transportation) seems to be the right option.

Explanation:

  • This same fourth phase throughout the past decades of U.S. regulatory requirements started throughout the late 1970s as well as focuses primarily on industrial protectionism.
  • Throughout that stage of development, the current regime has focused on increasing competitive advantage throughout sectors such as construction, utility services, transshipment as well as wealth management by deactivating an amount of regulation but rather allowing companies to diversify their business processes to developing companies.

The interpretation of that same question has been characterized throughout the explanation paragraph below.

4 0
2 years ago
An investor, such as a bank, may prefer to invest in securities backed by a pool of mortgages purchased in the secondary market
kati45 [8]

Answer:

b. mortgage backed securities diversify credit risk for the investor.

Explanation:

An investor, such as a bank, may prefer to invest in securities backed by a pool of mortgages purchased in the secondary market rather than in an equal dollar amount of mortgage loans because <u>mortgage backed securities diversify credit risk for the investor.</u>

In Mortgage Backed Securities, credit risk is diversified as there are many borrowers and investors between whom credit risk diversifies. So that makes investor such as bank prefer the option.

8 0
2 years ago
Other questions:
  • When an administrator at a local hospital prepares a series of charts and graphs pertaining to the patients that have stayed at
    7·1 answer
  • Sean works for Cash'n'Carry, a payday loan company. He has been asked to develop an ethical mission statement to reassure custom
    5·1 answer
  • How do trade agreements help the countries involved?
    7·1 answer
  • 2) The primary deficit is equal to A) the amount by which government purchases, transfers, and net interest exceed tax revenues.
    6·1 answer
  • Why are the real income levels of Americans affected by rising prices?
    11·1 answer
  • After saving money in her piggy bank for 3 years, Beverly decided to deposit $5,000 of the money in the Millertown Bank. If the
    5·1 answer
  • People are living paycheck to paycheck why is that a problem
    12·1 answer
  • How much money does a therapyst make an hour/ and how much would they make in a year
    7·2 answers
  • PLEASE HELP !!!!!!!!
    14·1 answer
  • Deforestation can significantly reduce the amount of water vapor in the atmosphere. see section 12.16 (page) . true false
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!