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antoniya [11.8K]
3 years ago
11

You borrow $1,000 from the bank and agree to repay the loan over the next year in 12 equal monthly payments of $90. However, the

bank also charges you a loan initiation fee of $27, which is taken out of the initial proceeds of the loan. What is the effective annual interest rate on the loan, taking account of the impact of the initiation fee? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Use a financial calculator or Excel.)
Business
1 answer:
Furkat [3]3 years ago
3 0

Answer:

The answer is 1,64%

Explanation:

Since the $27 dollars is taken out of the loan amount the net proceeds we are receiving are $973

We will use the $973 as our Present Value. (PV)

N = 12 which is the number of periods over which repayment takes place. In this case 12 months.

Payments are the monthly replayments of $90 which will be entered in as PMTS.

Thus the following will be entered onto a financial calculator;

N = 12 PMT = -90 PV = 973 FV = 0 COMP I =

Interest = 1,6427 %

rounded we now have an answer of 1,64% using a financial calculator to work out the interest charge

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7 0
2 years ago
In 2017 Wilkinson Company had net credit sales of $2250000. On January 1, 2017, Allowance for Doubtful Accounts had a credit bal
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Answer:

$114,000

Explanation:

Given that,

Net credit sales = $2,250,000

Opening allowance for Doubtful Accounts = $36,000

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Firstly, we need to find the excess amount to be adjusted to allowance for Doubtful Accounts. It is calculated as follows:

= Uncollectible accounts receivable written off  - Opening allowance for Doubtful Accounts

= $90,000 - $36,000

= $54,000

Allowance amount:

= 10% of the balance in receivables

= 0.1 × $600,000

= $60,000

Therefore, the required adjustment to the Allowance for Doubtful Accounts at December 31, 2017 is determined by summing up the excess amount and  allowance amount.

= Excess amount to be adjusted to allowance for Doubtful Accounts + Allowance amount

= $54,000 + $60,000

= $114,000

4 0
3 years ago
consider a hypothetical economy in which households spend 0.5 of each additional dollar they earn and save the remaining 0.5
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hypothetical economy in which households spend 0.5 of each additional dollar they earn and save the remaining 0.5

<h3>What is hypothetical economy?</h3>

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Each economy operates under its own set of conditions and assumptions. Traditional economies, command economies, mixed economies, and market economies are the four major types of economic systems.

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2 years ago
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Answer:

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At current price,

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As Qd = 55, Qs = 130

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so that Quantity Demanded rise & Quantity supplied falls, till Qd = Qs

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As if P falls by 1, then P = 159

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