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Free_Kalibri [48]
3 years ago
15

A bank agrees to lend via simple loan $100 today to Thomas. The agreement is based on that the yearly interest rate is 15%. If T

homas must pay back the loan in 10 years, how much will he be required to reimburse to the bank?
Business
1 answer:
Ede4ka [16]3 years ago
7 0

Answer:

$404,55 (cumulative) or $250 (american)

Explanation:

This explanation considers a cumulative interest rate in the simplest way. And american amortization system. Consider that there is also French and German systems which works differently depending on the way the loan reimbursed

Cummulative Interest Rate:

Consider this:

If Thomas had to return it in one year he would have to return $115 ($100+15%) which is equal to 100*(1+0.15)

Now, at the begining of the second year, his debt is $115, and at the end its $115+15% = 132,25.  Which is equal 100*(1+0.15)*(1+0.15), this is equivalent to 100*(1+0.15)^{2}

The general formula for cummulative interest is C(1+i)^{n}

Where

C = is the loan amount [in this case: 100]

i = is the interest rate [in this case: 0.15]

n = is the number of periods until [in this case: 10]

American System

The american system is quite straight forward:

Thomas should pay $15 every year for 10 years, and with the last payment he should pay $115.

This is because in this system Thomas returns the capital (the amount of the loan) at the end; and each year he only pays the interest .

$15*10 + $100 = $250

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Answer:

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*****Freight Charges forms part of cost of Inventory (IAS 2) therefore write off freight cost to Inventory Account****

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<u>Journal entries - Periodic inventory system</u>

<em>Inventory purchases (on account) 164,000</em>

Inventory $ 164000(debit)

Trade Payables $ 164000 (credit)

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Freight Charges $ 19000 (debit)

Bank $19000 (credit)

*****Freight Charges forms part of cost of Inventory (IAS 2) therefore write off freight cost to Inventory Account****

Inventory $19000 (debit)

Freight Charges $ 19000 (credit)

<em>Inventory returned to suppliers (for credit) 21,000</em>

Trade Payable $ 21000 (debit)

Inventory $21000(credit)

<em>Sales (on account) 259,000</em>,

Trade Receivables $ 259000 (debit)

Revenue $259000(credit)

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Explanation:

<em>Inventory purchases (on account) 164,000</em>

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Derecognise expense- Freight and recognise an asset - Inventory

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De-recognise Asset - Inventory and De-recognise Liability - Account Payable

<em>Sales (on account) 259,000</em>,

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Suppose that the quantity of DVD players sold increased from 200 to 400 when the price fell from $225 to $175. Over this price r
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Answer:

Option D.

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Q_1=200, Q_2=400

P_1=225, P_2=175

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E_d=\frac{400-200}{175-225}\times \frac{225+175}{200+400}

E_d=\frac{200}{-50}\times \frac{400}{600}

E_d=-\frac{8}{3}

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The question is reconstructed below:

Which of the following best describes a Nash equilibrium?

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D. An outcome which both competitors see as optimal, given the strategy of their rival.

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