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prisoha [69]
3 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]3 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.

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What are the 6 benefits of a market economy for producers?
muminat
You'll save money and make more money .you'll create and propagate your own brand.you'll familiarize yourself with industry knowledge.you 'll build a network of suppliers.you'll be able to diversify.you'll save money and make even more money...
5 0
3 years ago
For each of the following scenarios, please decide whether there will be an increase or decrease in short-run aggregate supply,
algol13

Answer:

1.short run aggregate supply decreases

2.short run aggregate supply decreases

3.short run aggregate supply increases

Explanation:

The short run aggregate supply is the total production of goods and services in an economy holding some factors of production fixed.

1. Even in a healthy economy. As the natural rate of unemployment increases, short run aggregate supply decreases.

2. A rise in the price of lumber (inflation) would cause a decrease in short run aggregate supply.

3. An increase in productivity caused by the acquisition of capital equipment would cause the short run aggregate supply to increase.

8 0
3 years ago
Jessica who owns a restaurant in New York City and is generating handsome profit from the business, has decided to take a portio
lara [203]

Answer:

Financialisation

Explanation:

Financialisation is about changes in the actual conduct and meaning of work .

5 0
3 years ago
A proposed new investment has projected sales of $585,000. Variable costs are 44 percent of sales, and fixed costs are $187,000;
Tema [17]

Answer:

The projected Net Income is $70,784

Explanation:

The Pro- forma income Statement

Working Note:

Variable cost = Sales × 44%

= $585,000 × 44%

= $257,400

EBT (Earnings before Tax) = Sales - Variable cost - fixed cost - depreciation

= $585,000 - $257,400 - $187,000 - $51,000

= $89,600

Net Income = EBT × Tax rate

= $89,600 × 21%

= $70,784

8 0
3 years ago
In its first year of existence (year 1), SCC corporation (a C corporation) reported a loss for tax purposes of $30,000. How much
devlian [24]

Answer:

SCC won't pay any tax

Explanation:

Their loss of $30,000 in year 1 will be unused and made available to counterbalance the total generated earnings in year 2.

The $20,000 earnings in year 2 can be used to counterbalance the whole taxable income; so, SCC will not pay pay tax. SCC will have a ($10,000) loss carryover available for year 3 and beyond

6 0
3 years ago
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