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bekas [8.4K]
4 years ago
7

A banker can lend money at 9.1% compounded monthly or at 9.3% compounded quarterly. If the length of the loan is 15 years, which

type of loan profits the banker more?
Business
1 answer:
Kaylis [27]4 years ago
8 0

Answer:

The quarterly compounding is more profitable

Explanation:

We will compare the total payment under monthly payment to that under quarterly payment and the choose the higher one.

This is done as follows:

Monthly interest =  9.1%/12 = 0.758

number of months =15 × 12 = 180

Monthly payment = ( 1-1.00758^(-180))/0.00758=98.04

Total payment = 98.04 × 180 =17,647.31

Quarterly compounding

Quarterly interest rate = (9.3%/12)×3 = 2.325 %

number of quarter = 4×15 = 60

Quarterly payment = (1-1.002325^(-60))/0.002325= 374.17

Total payment = 374.17× 60 = $22,449.91

The quarterly compounding produces total repayment  a higher than the monthly. Hence, the quarterly repayment is more profitable

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The correct answer is letter "B": Entity.

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The Accounting Entity principle or Economic Entity principle states that a commonly co-owned group of businesses can entitle to be a single entity with the purpose to generate a consolidated financial statement. A business entity could be considered to be a sole proprietorship, partnership, or corporation.

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What is business mathematics ? and what are the basics of business mathematics ?
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8 0
3 years ago
barber charges $20 per haircut. The total cost for running his home-based business is $4,000 per month, which includes his salar
Lelu [443]

The minimum price that the barber must charge <em>to increase his salary to $4,000</em> for each of the 200 haircuts is <em>A. $25.</em>

Data and Calculations:

Charge per haircut = $20

Total cost per month = $4,000

Monthly salary = $3,000

Other costs per month = $1,000 ($4,000 - $3,000)

Minimum number of haircuts per month = 200

Expected monthly salary per month = $4,000

Total new monthly expenses = $5,000

Minimum price to charge per haircut = $25 ($5,000/200)

Thus, the minimum price that the barber must charge <em>to increase his salary to $4,000</em> without increasing the number of haircuts is $25.

Learn more: brainly.com/question/14872023

6 0
3 years ago
A company planning to market a new model of motor scooter analyzes the effect of changes in the selling price of the motor​ scoo
Andrew [12]

Answer:

A. If the motor scooter is sold for $2.480, then the net present value (NPV) for the product will be zero.

Explanation:

As we believe that The break even point is the point where the organization has no income gained and no loss incurred While the present net value is the value that determines whether or not the projects will be approved after considering the discounted cost.  

It means that if the original investment is less than the present value then the proposal is otherwise refused, the break even point is where the net present value is zero

Hence, the first option is correct

3 0
4 years ago
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