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boyakko [2]
3 years ago
12

Suppose you borrowed $15,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years.

By how much would you reduce the amount you owe in the first year?
$2,404.91


$2,531.49


$2,658.06


$2,790.96


$2,930.51
Business
1 answer:
jekas [21]3 years ago
8 0

Answer:

The amount that would be reduce for the first year is $2,531.49

Explanation:

Hi, first we have to find the amount of the equal installments to be paid for the next 5 years, for that, we need to solve for "A" the following equation.

PresentValue=\frac{A((1+r)^{n}-1) }{r(1+r)^{n} }

Where:

Present Value = the borrowed amount

A = equal installments

r = rate of the loan

n = number of periodic and equal installments

Everything should look like this.

15,000=\frac{A((1+0.085)^{5}-1) }{0.085(1+0.085)^{5} }

15,000=A(3.940642079)

Therefore, A= $3,806.49

Now, in order to find the amount that would be reduced in the first year, we have to use the following formula.

AMT(reduced)=Payment-Interest

So, it should look like this.

AMT(reduced)=3,806.49-15,000*0.085

AMT(reduced)=3,806.49-1,275=2,531.49

Best of luck.

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Answer:

1.99%

Explanation:

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Return={[$20 * (100%-6%) * (1.10 - .015)] -$20}/$20

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Return = 1.99%

Therefore your return if you sold the fund at the end of the year would be 1.99%

3 0
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Brief Exercise 3-12 Record the adjusting entry for interest payable (LO3–3) Midshipmen Company borrows $17,000 from Falcon Compa
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Answer:

Calculate the 2021 year-end adjusted balances of Interest Payable and Interest Expense.

July 1 2021    

   

Db Cash ________________________ 17000    

Cr Borrow payable______________________________  17000        

December 31 2021      

Db Interest expense______________ 1020    

Cr Interest payable_______________________________  1020  

   

June 30 2022          

Db Interest expense______________ 1020    

Cr Interest payable_______________________________  1020  

Explanation:

Borrow                       Loan__%I__ Int.___Amount      

July 1 2021 to December 31 2021  17000 6% 1020__18020

   

July 1 2021    

1    

Db Cash ________________________ 17000    

Cr Borrow payable______________________________  17000  

   

December 31 2021    

   

Db Interest expense______________ 1020    

Cr Interest payable_______________________________  1020  

   

June 30 2022    

   

Db Interest expense______________ 1020    

Cr Interest payable_______________________________  1020  

6 0
3 years ago
The Laurel Corporation starts the year with a beginning inventory of 360 units at $11 per unit. The company purchases 530 units
Gala2k [10]

Answer:

Cost of goods sold= $1,980

Explanation:

Giving the following information:

beginning inventory of 360 units at $11 per unit

February= purchases 530 units at $16 each

October= 320 units at $12 each

Laurel sells 180 units during the year.

The cost of goods sold is calculated using the purchase price of the firsts units incorporated.

Cost of goods sold= 180*11= $1,980

6 0
3 years ago
_____________________ can lead to a situation where, even if sellers are faced with a situation of _______________, they will de
Karo-lina-s [1.5K]

Answer: Answers are:<u> Imperfect information; excess supply; higher quantity.</u>

<u />

Explanation: <u>Imperfect information</u> can lead to a situation where, even if sellers are faced with a situation of <u>excess supply</u>, they will decide not to cut prices for awhile because they know that buyers in this situation will not react by purchasing a <u>higher quantity.</u>

5 0
3 years ago
Matt is considering the purchase of an investment that w ill pay him $12,500 in 12 years. If Matt wants to earn a return equal t
babymother [125]

Answer:

The correct answer is $5,550.15.

Explanation:

According to the scenario, the given data are as follows:

Future value (FV) = $12,500

Time period (n) = 12 years

Rate of interest (r) = 7%

So, we can calculate the present value that should be invested by using following formula:

FV = PV ( 1 + r)^n

So, by putting the value, we get

$12,500 = PV ( 1 + 0.07)^12

$12,500 = PV (2.25219158896)

PV = $12,500 ÷ 2.25219158896

PV = $5,550.14949051122 = $5,550.15

Hence, the present value that should be invested is $5,550.15.

6 0
3 years ago
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