Answer: A. incorrect because part of each payment is to principal and to interest. Therefore, only a portion of the payment goes to interest, so the full amount should not be included when computing the rate of interest paid.
Explanation:
When paying back a loan, there are two components to the periodic interest payment. The first component is the interest payment. This is the payment to compensate the borrower for loaning out the money and is based on the interest rate and the principal left to be repaid.
The second component goes towards repaying the principal of the loan which in this case is $10,000. When computing the periodic interest rate therefore, the entire amount paid per period should not be used as it would inflate the interest rate.
Answer:
We need the slope of each category.
Explanation:
Having the amount of each category is not enough to find the responsive of each one of them to a change in their prices, we need a measure called elasticity, this indicator measures the responsive of a product to a change in its price.
Answer:
Money multiplier for this economy is 5
Explanation:
Initial bank reserves = reserve deposit ratio * $500 = 0.2 * $500 = $100
1) increase in bank reserves by $1 , bank reserve deposit increases from $500 to $101 / 0.2 = $505 and the money supply increases by $505 - $500 = $5
2) increase in bank reserves by $5 , bank reserve deposit increases from $500 to $105 / 0.2 = $525 and the money supply increases by $525 - $500 = $25
3) increase in bank reserves by $10 , bank reserve deposit increases from $500 to $110 / 0.2 = $550 and the money supply increases by $550 - $500 = $50
as money supply rises by 5 times the increase in bank reserves , the money multiplier in this economy is 5.
Explanation:
An income statement helps business owners decide whether they can generate profit by increasing revenues, by decreasing costs, or both. It also shows the effectiveness of the strategies that the business set at the beginning of a financial period
Answer:
$3,533.37
Explanation:
In this question, we use the Future value formula which is shown below:
Future value = Present value × (1 + rate)^number of years
where,
Present value = $2,900
Rate = 5.00% ÷ 2 = 2.5%
Number of years = 4 year × 2 = 8 years
So, the future value
= $2,900 × (1 + 2.5%)^8
= $2,900 × 1.2184028975
= $3,533.37
Hence, the future value is $3,533.37 or the money that is to be expected at the end of this period
