1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
goblinko [34]
3 years ago
9

Rob Grier, a friend of yours, has recently purchased a home for $125,000, paying $25,000 down and the remainder financed by a 10

.5%, 20-year mortgage, payable at $998.38 per month. At the end of the first month, Rob receives a statement from the bank indicating that only $123.38 of principal was paid during the month. At this rate, he calculates that it will take over 67 years to pay off the mortgage. Is he right?
Business
1 answer:
KonstantinChe [14]3 years ago
7 0

Answer:

No

Explanation:

Rob is considering their principal payment will be 123.38 everytime.

<u>It will increase through time while interest payment decrease.</u>

Month  Beg Cuota Rate Interest Principal payment Ending

1 100,000 998.38 0.00875 875                 123.38 99,877

2 99,877 999.38 0.00875 873.92           125.46 99,751

3 99,751 1000.38 0.00875 872.82          127.56 99,624

4 99,624 1001.38 0.00875 871.77          129.67 99,494

5 99,494 1002.38 0.00875 870.57           131.81 99,362

6 99,362 1003.38 0.00875 869.42           133.96 99,228

<u>The cuota and rate keep at the same level.</u>

But the interest decrease, because each time the principal is lower, giving place to a higher repayment.

The loan will repay at 20 year as state in the mortgage

You might be interested in
On January 1, 2021, Splash City issues $340,000 of 9% bonds, due in 20 years, with interest payable semiannually on June 30 and
Evgesh-ka [11]

Answer:

Dr cash                                          $310,831

Dr discount on bonds payable   $29,169

Cr bonds payable                                             $340,000

On 30th June 2021

Dr  interest expense      $ 15,542  

Cr cash                                            $15,300

Cr discount on bonds payable        $242

On 31st   December  2021

Dr  interest expense      $ 15,554  

Cr cash                                            $15,300

Cr discount on bonds payable        $254

Explanation:

The bond issued at a discount is the first bond whose cash proceeds of $310,831 were less than face value of $340,000.

Discount=face value -cash proceeds=$340,000-$310,831=$29,169.00  

Find attached bond amortization schedule.

Download xlsx
7 0
3 years ago
Perez Company reported the following data regarding the product it sells: Sales price $ 56 Contribution margin ratio 25 % Fixed
suter [353]

Answer:

Contribution margin ratio = 1 - variable cost ratio

                                          = 25%

(a) Break\ even\ in\ dollars=\frac{fixed\ costs}{contribution\ margin}

Break\ even\ in\ dollars=\frac{350,000}{0.25}

                                            = 1,400,000

 Break\ even\ in\ units=\frac{Break\ even\ in\ dollars}{sales\ price}

 Break\ even\ in\ units=\frac{1,400,000}{56}

                                           = 25,000

(b) For profit of $42,000,

sales=\frac{Profit+fixed\ cost}{contribution\ margin\ ratio}

sales=\frac{42,000+350,000}{0.25}

               = 1,568,000

In\ units=\frac{sales}{sales\ price}

In\ units=\frac{1,568,000}{56}

                    = 28,000

(c) variable cost = sales price × variable cost ratio

                           = $56 × 75%

                           = $42

New contribution margin = \frac{New\ sales\ price-variable\ cost}{New\ sales\ price}

New contribution margin = \frac{70-42}{70}

                                          = 0.4

                                          = 40%

New\ Break\ even\ in\ dollars=\frac{fixed\ costs}{contribution\ margin}

New\ Break\ even\ in\ dollars=\frac{350,000}{0.4}

                                                        = $875,000

New\ Break\ even\ in\ units=\frac{New\ Break\ even\ in\ dollars}{New\ sales\ price}

New\ Break\ even\ in\ units=\frac{875,000}{70}

                                                    = 12,500

3 0
3 years ago
You are considering buying a stock with a beta of 3.05. If the risk-free rate of return is 8.0%, and the expected return for the
elena55 [62]

Answer:

38.5%

Explanation:

Rf = 8.0%

Rm = 18.0%

Beta = 3.05

RRR ?

from the given data the capital asset pricing model will be used to calculate the RRR

RRR = Rf + β (Rm - Rf)

        =8.0 + 3.05 (18.0-8)

         =38.5%

6 0
2 years ago
Explain how government actions affect a circular flow model of a mixed economy.
vekshin1

A circular flow economy includes buying and selling between businesses, households, and governments.

The government takes money in through taxes and tariffs, and has expenditures on things like roads, military spending, and other federally funded programs. In this way the government both gives and takes in the economy.

3 0
2 years ago
All the long-term debt of a government, including the long-term debt that will be financed by Enterprise Fund revenues, is repor
Studentka2010 [4]

Answer: False

Explanation:

False.

Long term debt is a debt owed by an economic entity which could either be the inividual, a business or the government and such debts are expected to mature in a period of at least one year.

It should be noted that the long term debt isn't reported in fund level financial statement but rather it's reported in government wide statements.

3 0
3 years ago
Other questions:
  • The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $100,0
    6·1 answer
  • Listed options on U.S. exchanges are available on all of the following currencies except:_________.A) Canadian dollar. B) Japane
    10·1 answer
  • Roger's organization received a mass email message that attempted to trick users into revealing their passwords by pretending to
    11·1 answer
  • Mr. musselman is the head coach of the high school football team. he notices that, after learning the names of the players on th
    10·1 answer
  • A posthypnotic suggestion is made ________ a hypnosis session and intended to be carried out in the future when the subject is _
    10·1 answer
  • Storm Concert Promotions Valle Home Builders
    13·1 answer
  • If supply and demand both increase then equilibrium price will also increase. True or False
    9·1 answer
  • Explain briefly what kind of Consumer Service is particularly open to an entrepreneur.
    9·1 answer
  • Television advertising offers many advantages to national advertisers, but it is a relatively ______ form of advertising
    8·1 answer
  • There are three
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!