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Margarita [4]
3 years ago
12

Suppose you have taken out a $400,000 fully amortizing fixed-rate mortgage loan that has a term of 15 years and an interest rate

of 3.75%. In month 1 of the mortgage, how much of the monthly mortgage payment does the interest portion consist of?
Business
1 answer:
kipiarov [429]3 years ago
4 0

Answer:

$1,250

Explanation:

interest on the first payment = principal x interest rate x time = $400,000 x 3.75% x 1/12 = $1,250

as you make monthly payments, the principal amount will start decreasing by monthly payment - interest, and that should also decrease the interest charged per month and increase the amount of principal paid each time.

You might be interested in
Complete the steps in the measurement of external transactions.
ZanzabumX [31]

Answer:

November 1 Issue common stock in exchange for $11,000 cash.

Dr Cash 11,000

    Cr Common stock 11,000

November 2 Purchase equipment with a long-term note for $1,500 from Spartan Corporation.

Dr Equipment 1,500

    Cr Notes payable 1,500

November 4 Purchase supplies for $1,100 on account.

Dr Supplies 1,100

    Cr Accounts payable 1,100

November 10 Provide services to customers on account for $7,000.

Dr Accounts receivable 7,000

    Cr Service revenue 7,000

November 15 Pay creditors on account, $1,200.

Dr Accounts payable 1,200

    Cr cash 1,200

November 20 Pay employees $1,000 for the first half of the month.

Dr Wages expense 1,000

    Cr cash 1,000

November 22 Provide services to customers for $9,000 cash.

Dr Cash 9,000

    Cr Service revenue 9,000

November 24 Pay $600 on the note from Spartan Corporation.

Dr Notes payable 600

    Cr Cash 600

November 26 Collect $5,000 on account from customers.

Dr Cash 5,000

    Cr Accounts receivable 5,000

November 28 Pay $1,200 to the local utility company for November gas and electricity.

Dr Utilities expense 1,200

    Cr Cash 1,200

November 30 Pay $3,000 rent for November.

Dr Rent expense 3,000

    Cr Cash 3,000

Cash                                               Common stock

debit               credit                      debit               credit

1,200                                                                      5,000

11,000                                             <u>                        11,000</u>

                      1,200                                               16,000

                      1,000

9,000

                      600

5,000

                      1,200

<u>                       3,000</u>

19,200

Accounts receivable                     Supplies

debit               credit                      debit               credit

400                                                500

7,000                                             <u>1,100                           </u>

<u>                        5,000</u>                     1,600

2,400

Equipment                                     Accounts Payable

debit               credit                      debit               credit

7,400                                                                     1,000

<u>1,500                         </u>                                             1,100

8,900                                             <u>1,200                        </u>

                                                                              900

Notes Payable                               Service revenue

debit               credit                      debit               credit

                      2,000                                              7,000

                      1,500                       <u>                        9,000</u>

<u>600                           </u>                                             16,000

                      2,900                     <u>6,000              closed</u>

Retained Earnings                        Wages expense

debit               credit                      debit               credit

                       1,500                      1,000

<u>                        10,800</u>                    <u>closed            1,000 </u>

                       12,300

Utilities expense                           Rent expense

debit               credit                      debit               credit

1,200                                              3,000

<u>closed            1,200 </u>                      <u>closed             3,000</u>

net income for the month = $16,000 - $5,200 = $10,800, so retained earnings should increase by $10,800

5 0
3 years ago
Carter Pearson is a partner in Event Promoters. His beginning partnership capital balance for the current year is $55,500, and h
Jlenok [28]

Answer:

b. 9.75%

Explanation:

When a partner invests in a business, he/she expects to get return on his equity in the business. The major reason for this is to compare his/her return in the partnership business with the return he/she could get elsewhere.

The return on partner equity is calculated by dividing his/her net income from the partnership business by his/her average capital for the period.

The formula is given below:

<u> Net income       </u>  x 100

Average capital

Average capital  = <u>Opening capital balance + Closing capital balance</u>

                                                                    2

For Carter Pearson, the average capital is =<u> $55,500 + $62,500</u>

                                                                                   2

= $59,000

The return on equity will be: <u>$5,750  </u> x 100

                                                $59,000

= 9.7457

= 9.75%   - approximate to two decimal point.

5 0
3 years ago
Nu Company reported the following pretax data for its first year of operations. Net sales 2,910 Cost of goods available for sale
kozerog [31]

Answer:

$434

Explanation:

Net sales                     = $2,910

-Cost of goods sold    = $1,560 (Working)

=Gross profit                = $1350

-Operating expenses  = $730

=Profit before Tax        = $620

-Tax 30%                      = $186

=Net Profit/Net Income= $434

<u>Working</u>

Cost of goods sold = Cost of goods available for sale - Closing Inventory if LIFO is elected

Cost of goods sold = 2,430 - 870 = 1560

5 0
3 years ago
Read 2 more answers
Harriet Kirby, a fund raising manager at a women's rights organization, experienced a bad incident last year with the public rel
murzikaleks [220]

Answer:

A

Explanation:

selective perception is a form of bias when new information is interpreted in a way that conforms to existing values and beliefs.

4 0
2 years ago
Part 1: Kathleen received land as a gift from her grandfather. At the time of the gift, the land had a FMV of $105,000 and an ad
artcher [175]

Answer:

d. $25,000

b. ($5,000) loss

Explanation:

In the first case, the gain or loss on this transaction is

Gain or loss on this transaction is

= Sale value of the land - adjusted basis of the land

= $110,000 - $85,000

= $25,000

We ignored the fair market value of the land for computing the gain or loss of the transaction

In the second case, the gain or loss on this transaction is

Gain or loss on this transaction is

= Sale value of the land - fair market value

= $80,000 - $85,000

= -$5,000 loss

8 0
3 years ago
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