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IgorLugansk [536]
3 years ago
9

Suppose, you sold an apartment house by accepting $1,000,000 down and monthly payments of $15,000 per month for 10 years. You pl

ace the entire down payment and all payments as they are received into a money market account earning 5 percent compounded monthly. What is the amount you will have accumulated in the money market account when the mortgage is paid of
Business
1 answer:
Nadya [2.5K]3 years ago
3 0

Answer:

The present value is $3,991,855.88

Explanation:

The interest given can be converted into effective annual rate using the below formula:

EAR = [(1 +stated rate/no. of compounding periods) ^no. of compounding periods - 1]* 100

EAR=(1+5%/12)^12-1*100

       =5.12%

FV of downpayment=PV*(1+r)^N

                                  =$1000000*(1+5.12%)^10

                                   =$ 1,647,606.60  

Future of an ordinary annuity=A((1+r)^N-1/r

                                                =$15000*((1+5.12%/120)^10*12-1))/5.12%/120

                                                =$2,344,249.28

Total present values=2344249.28+1,647,606.60  

                                  =$3,991,855.88

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3 years ago
Obeying the law is what kind of <br> Ethical Behavior
Lapatulllka [165]

Answer:

Basic level

Explanation:

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Ethical behavior is about being morally right in your actions, it is no where defined properly what is ethical, sometimes even unethical behavior does not count in illegal behavior.

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But since it is unethical it is not correct morally, although all the legal actions are ethical.

4 0
3 years ago
The starting point for preparing the operating activities section using the indirect method is ______. Multiple choice question.
vitfil [10]

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<h3>How is net income demonstrated?</h3>

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5 0
2 years ago
The management of Bullinger Corporation would like to investigate the possibility of basing its predetermined overhead rate on a
Anit [1.1K]

Answer:

$5,160

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Predetermined Overhead Rate on Capacity = $34,840 / 29,000 MH

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4 0
3 years ago
An example of opportunity cost:
maria [59]

Answer: b. Is the Chinese food that you gave up when you chose to eat Italian food.

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8 0
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