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Leno4ka [110]
2 years ago
6

Loan A has the same original principal, interest rate, and payment amount as Loan B. However, Loan A is structured as an annuity

due, while Loan B is structured as an ordinary annuity. The present value of Loan A will be
Business
1 answer:
7nadin3 [17]2 years ago
8 0

Answer:

Earlier than Loan B

Explanation:

In an annuity due, an occurring payment is made at the beginning of consecutive period.  (such as  rent  that is paid at the beginning of each months)

In ordinary annuity, an occurring payment is made at the the end of the consecutive period. (such as rent that is paid at the end of the year)

Since the payment of annuity due always received earlier by the creditor than ordinary annuity, the present value of loan A will always change Earlier than Loan B.

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Explain how someone can be employed and still live below the poverty line.
Rama09 [41]

- person working a part time job but seeking full time employment
-had a job but earns low wages
-people that have large families
-member of family with serious health issue
5 0
3 years ago
A perfectly elastic demand curve implies that the firm: A) must lower price to sell more output. B) can sell as much output as i
dsp73

Answer:

A perfectly elastic demand curve means that the firm can sell as much output as it chooses at the current price.

Explanation:

The perfectly elastic demand implies that the demand curve is horizontal line parallel to the X axis. The price is fixed at a point and the firm can sell any amount of output at this point. The demand is infinite at the given price level. If the firm makes any changes in this price level, the demand will become zero.

4 0
3 years ago
You open a savings account with a 0.5% per year nominal interest rate, and the economy experiences 3% per year inflation. a. Wha
Firlakuza [10]

Answer:

a. The nominal interest rate is 0.5%, and the real interest rate is -2.5%.

b. The purchasing power of money in the account will reduce.

Explanation:

a. What is the nominal and real annual interest rate on the account? The nominal interest rate is %, and the real interest rate is %.

From the question, we have:

Nominal interest rate = 0.5%

Inflation rate = 3%

In economics, the real is interest rate is calculated as follows:

Real interest rate = Nominal interest rate - Inflation rate = 0.5% - 3% = -2.5%

Therefore, the nominal interest rate is 0.5%, and the real interest rate is -2.5%.

b. What will happen to the purchasing power of the money you place in the account over time? The purchasing power of money in the account will

From the question, the interest rate attached to the savings account is a nominal interest rate. Since the nominal interest rate, unlike the real interest rate, is an interest rate that is not adjusted for inflation, the purchasing power of money in the account will reduce.

3 0
3 years ago
The main reason for considering nonconstant growth in dividends is to allow for _____ growth rates over _____.
JulsSmile [24]

Based on the economic and financial analysis, the main reason for considering <u>nonconstant growth</u> in dividends is to allow for "<u>Supernormal</u>" growth rates over "<u>some finite length of time</u>."

This is because, in nonconstant growth, the growth rate cannot surpass the mandatory return indefinitely.

However, there is the probability that it could do so for some number of years.

Also, it should be noted that in this situation, the value of the stock equates to the present value of all the future dividends.

Hence, in this case, it is concluded that the correct answer is <u>supernormal</u> and <u>some finite length of time</u>.

Learn more here: brainly.com/question/13223703

7 0
3 years ago
Timmy Company's comparative balance sheet at January 31, 2017, and 2016. reports the following (in millions):
Irina-Kira [14]

Answer:

The Accounting Equation states that;

Assets = Liabilities + Equity

Equity as at 2016 = Assets - Liabilities

= 50 - 13

= $37 million

Equity as at 2017 = Assets - Liabilities

= 77 - 18

= $59 million

1. Timmy issued $13 million of stock and declared no dividends.

<em>The Net Income ( loss) will be the figure that gives the Statement of Equity a figure of $59 million.</em>

Net Income = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016  - Issuance of stock

= 59 - 37 - 13

= $9 million

Total stockholders' equity, January 31, 2016  ................ 37

Add: Issuance of stock ......................................................... 13

Net income  ......................................................................9

Less: Dividends declared......................................................0

Net loss.......................................................................................0

Total stockholders' equity, January 31, 2017...................59

2. Timmy issued no stock but declared dividends of $17 million.

Net Income (loss) = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016  + Dividends Declared

= 59 - 37 + 17

= $39 million

Total stockholders' equity, January 31, 2016  ................ 37

Add: Issuance of stock ......................................................... 0

Net income  ......................................................................39

Less: Dividends declared......................................................(17)

Net loss.......................................................................................0

Total stockholders' equity, January 31, 2017...................59

3. Timmy issued $20 million of stock and declared dividends of $27 million.

Net Income (loss) = Total stockholders' equity, January 31, 2017 - Total stockholders' equity, January 31, 2016  + Dividends Declared -  Issuance of stock

= 59 - 37 + 27 - 20

= $29 million

Total stockholders' equity, January 31, 2016  ................ 37

Add: Issuance of stock ......................................................... 20

Net income  ......................................................................29

Less: Dividends declared......................................................(27)

Net loss.......................................................................................0

Total stockholders' equity, January 31, 2017...................59

7 0
3 years ago
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