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
erik [133]
3 years ago
6

A loan is being repaid with level annual payments of $1,000. Calculate the outstanding balance of the loan if there are 12 payme

nts left. The next payment will be paid one year from now and the effective annual interest rate is 5%.
Business
1 answer:
aleksley [76]3 years ago
3 0

Answer:

$8,306.75

Explanation:

we are given the payment, the interest rate and the number of periods remaining, and we must first determine the principal amount:

P = (A x {([1+i]ⁿ)-1}) / {i[1+i]ⁿ}

  • A = $1,000
  • i = 5%
  • n = 12

P = ($1,000 x {([1+0.05]¹²)-1}) / {0.05[1+0.05]¹²}

P = ($1,000 x 0.79586) / 0.08979

P = $795.86 / 0.08979 = $8,863.57

Now we must determine the interest accrued in 1 year:

interest accrued in 1 year = principal x interest rate = $8,863.57 x 5% = $443.18

principal balance after the payment in 1 year = principal - (payment - interest expense) = $8,863.57 - ($1,000 - $443.18) = $8,306.75

You might be interested in
Students for a Democratic Society (SDS) was an activist organization in the 1960s that protested the Vietnam War, racial injusti
Lorico [155]
Answer: counterculture

explanation: "subculture" is wrong, as are "ethnocentric group," "popular culture organization," and "movement for cultural diffusion"; the counterculture was a biggg force in the 60's and this was definitely an example of it
3 0
3 years ago
Read 2 more answers
An investor buys an 8% municipal bond in the secondary market on a 10% basis. The investor does not accrete the bond discount an
adell [148]

Answer: C

Explanation:

This is because although the coupon rate is devoid of federal income tax any market discount is taxed as interest income earned. So so if there is a way that they can be taxed without jeopardizing their basic Federal income tax-free status, why not? The discount can be accreted annually and tax paid, or the tax can be paid at maturity or sale date.

5 0
2 years ago
Read 2 more answers
In calculating earnings per share, companies deduct preferred dividends from net income if:
Savatey [412]

Answer: Option B

Explanation: Earnings per share is calculated by dividing net income available to common shareholders with the weighted average number of shares.

Deduction of preferred dividends from net income is done only when dividends are declared by the entity, otherwise not. Preference shareholders have priority over common shareholders in case of dividends, so it will result in reduction of earnings to common shareholders but only when the dividends are declared and distributed.

7 0
3 years ago
A traditional cover letter’s format includes an introduction, a __________and a_____________ paragraph.
ehidna [41]

A traditional cover letter’s format includes an introduction, a body and a closing paragraph.

4 0
3 years ago
Using a company's cost of capital to evaluate a project is:
yaroslaw [1]

Answer: Option C  

             

Explanation: In simple words, cost of capital refers to the amount of return that the investor are expecting for tasking the risk of investing in the company. In other words, it is the amount the company has to offer in return to the investors for attaining the capital from the market.

Often the cost of capital is used to evaluate the profitability of the project, that is, if the return in project is higher than the cost of financing it should be taken by the company.

However there are other component while evaluating a project that is risks associated with it. Risk of every projects is different from the other and hence only those project should be evaluated on the basis of cost of capital that is similar to the company's average.

6 0
3 years ago
Other questions:
  • Aunt Maud's Premium Hand Lotion. The equilibrium price and quantity for Aunt Maud's lotion are $20 and 30 thousand units. What i
    8·1 answer
  • A master plan is devised for
    11·1 answer
  • Product Pricing: Single Product Assume that you plan to open a soft ice cream franchise in a resort community during the summer
    12·1 answer
  • Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will ad
    13·1 answer
  • Jocelyn contributes land with a basis of $60,000 and fair market value of $90,000 and inventory with a basis of $5,000 and fair
    9·1 answer
  • A common room pricing strategy used by hotels is to price each day for which this room can be reserved, as discussed in the lect
    6·1 answer
  • You are comparing two annuities with equal present values. The applicable discount rate is 6.5 percent. One annuity will pay $2,
    10·1 answer
  • The mission of a company lays out some desired future state and articulates that the company would like to achieve
    7·1 answer
  • Find the no-arbitrage cross exchange rate. The dollar-euro exchange rate is quoted as $1.60 = €1.00 and the dollar-yen exchange
    15·1 answer
  • The _____ perspective of the Balanced Scorecard management system describes the economic consequences of actions taken in the ot
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!