Answer: PMI will automatically be dropped when the balance reaches $117,000.
Explanation: PMI stands for private mortgage insurance. This is an insurance policy that banks often require lenders to have when they do not have a 20% down payment on a new home.
PMI is automatically dropped with the amount of the mortgage due is reduced to 78% of the original appraised value of the home. In this case, the home was originally purchased for $150,000. 78% x 150,000 = $117,000. When the loan reaches $117,000 the pmi will automatically be dropped.
Answer:
a. Accounting profits.
Account profit = Revenue - explicit cost
= 160,000 - 55,000
= $105,000
Present value of $105,000 per year for 3 years is:
= 105,000 * Present value interest factor of an Annuity, 3 years, 5%
= 105,000 * 2.7232
= $285,936
b. Economic profit
Economic profit = Revenue - explicit cost - implicit cost
= 160,000 - 55,000 - 70,000
= $35,000
Present value of $35,000 per year for 3 years:
= 35,000 * Present value interest factor of an Annuity, 3 years, 5%
= 35,000 * 2.7232
= $95,312
Note: The profits were treated as annuities as they were constant.
Answer:
$41,667
Explanation:
Break even (Sales dollars) = Fixed Cost ÷ Contribution margin ratio
therefore
the sales dollars level required to break even is $41,667
Answer:
The two accounts will have the same balance after 41.8 years
Explanation:
Hi, first, let´s intruduce the mathematical expression for the future value of each investment.
$2,000 compounded continously
$11,000 at 4% compounded annually (equivalent to effective annual)
Since the problem is asking when the future value of both investment will reach an equal amount of money, we solve for "t" the resulting expression:
So, this 2 accounts will need 41.8 years to equal their balance. You can check your result by substituting "t" in both equations, they must have the same future value.
Best of luck.
Answer:
The correct answer is A.
Explanation:
Bond is the instrument which is a fixed income and it represents a loan that is made by an investor to the borrower It is an IOU among the borrower and the lender which involves the payment as well as the loans details. It is used by the companies, states, sovereign governments and municipalities for financing the operations of the business.
Therefore, it is a instrument of debt, which the issuer has taken a loan.