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Bess [88]
3 years ago
11

You have a loan outstanding. It requires making six annual payments of $ 6 comma 000 each at the end of the next six years. Your

bank has offered to restructure the loan so that instead of making the six payments as originally​ agreed, you will make only one final payment in six years. If the interest rate on the loan is 7 %​, what final payment will the bank require you to make so that it is indifferent to the two forms of​ payment?
Business
1 answer:
BlackZzzverrR [31]3 years ago
8 0

Answer: The final payment would be: $42919,74.

Explanation: To simplify the work we must make a timeline:

0            1               2             3           4              5               6

        $6000      $6000     $6000    $6000    $6000       $6000

These would be the normal conditions of the loan.

but if instead of making the 6 payments only one is made at the end:

We must use the FV annuity formula:

6000 × \frac{(1+0,07)^{6} - 1 }{0,07} = <u>42919,74</u>

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Prince Paper has budgeted the following amounts for its next fiscal​ year: Total fixed expenses $ 900 comma 000 Selling price pe
stepan [7]

Answer:

The effect on net operating income would be an increase of $137,900

Explanation:

Giving the following information:

Selling price $85

Variable expenses per unit $ 35

If Price Paper spends an additional $12,100 on​ advertising, sales volume should increase by 3,000 units.

To calculate the effect on income, we need to determine the incremental total contribution, and deduct the incremental fixed costs:

Effect on income= 3,000*(85 - 35) - 12,100= $137,900

8 0
4 years ago
You purchased 100 shares of IBM common stock on margin at $70 per share. Assume the initial margin is 50%, and the maintenance m
SIZIF [17.4K]

Answer:

$50

Explanation:

The computation of the stock price level is shown below:

Maintenance margin = Number of shares purchased × price - loan amount ÷  Number of shares purchased × price

30% = 100 shares × price - $3,500 ÷ 100 shares × price

30% × 100 shares × price = 100 shares × price - $3,500

30 × price = 100 shares × price - $3,500

After solving this, the price would be $50

And, the loan amount equal to

= Number of shares purchased × per share price × initial margin

= 100 shares × $70 × 50%

= $3,500

3 0
3 years ago
If the federal funds rate were above the level the Federal Reserve had targeted, the Fed could move the rate back towards its ta
Dmitriy789 [7]

Answer:

The correct answer is option b.

Explanation:

If the federal fund's rates were above the targeted rate, the Fed would need to move it towards the targeted rate. To move the interest rate towards the targeted rate, the government would need to increase the money supply. This can be done by buying bonds. When the Fed buys bonds they pay for it, this causes the money supply to increase. As the supply curve shifts to the right, the interest rate will fall down.

4 0
3 years ago
What are high-risk loans?
WITCHER [35]
"A high-risk loan is a financing or credit product that is considered more likely to default, compared to other, more conventional loans."

I hope this helps ^-^
4 0
3 years ago
Read 2 more answers
Bill heard, as part of the _____ curriculum in his school, that certain races were not as good as others, and that coolness was
Alik [6]
<span>Bill heard, as part of the corridor curriculum in his school, that certain races were not as good as others, and that coolness was the key to everything. corridor curriculum means what students teach one another outside of the class room,usually negative.</span>
7 0
3 years ago
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