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Nuetrik [128]
3 years ago
10

why might a bank offer to make a loan to a consumer at a low initial rate which will increase after a set period of time?

Business
1 answer:
Ira Lisetskai [31]3 years ago
7 0
Since there's no available options,

There are basically two reasons :
- To make it look more profitable for the debtor
- The bank offer a lower initial rate to reduce the risk of Bad Debt Expense.

When bank offer a loan, there are always a risk of the debtor not able to return the loan. That's why bank lower the initial rate at first. After a set period of time, when the debtor became more financially stable, that's when the interest started to increase so the bank could gain some profit
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A company issues 8% bonds with a par value of $190,000 at par on January 1. The market rate on the date of issuance was 7%. The
cluponka [151]

Answer:

$7,600

Explanation:

The computation of cash paid on July 1 to the bondholders is shown below:-

cash paid on July 1 to the bondholders = Par Value × Semi annual coupon rate

= $190,000 × 6 months ÷ 12 months × 8%

= $190,000 × 0.5 × 0.08

= $7,600

We considered the 6 months as semi-annually is mentioned in the question

Therefore for computing the cash paid on July 1 to the bondholders we simply applied the above formula.

7 0
3 years ago
Bill is the owner of a house with two identical apartments. He resides in one apartment and rents the other apartment to a tenan
Mnenie [13.5K]

Answer:

B. $2,600

Explanation:

The computation of the net rental income is shown below:

= Monthly rental payments × total number of months in a year - (utilities + maintenance & repairs  + insurance) × percentage - depreciation expense

= $550 × 12 months - ($3,600 + $900 + $500) × 50% - $1,500

= $6,600 - $2,500 - $1,500

= $2,600

Since only one apartment is on rent so we considered the expenses of the building at 50% not full value and the same is applied above

5 0
3 years ago
Assume that during 2017, Cypress Semiconductor Corporation reported net cash provided by operating activities of $155,793,000, n
xenn [34]

Answer:

Free cash flow will be equal to $18513000

Explanation:

We have given cash provided for operating activities = $155793000

Capital expenditure = $132280000

Dividend paid = $5000000

We have to find the free cash flow

We know that free cash flow is given by

Free cash flow = cash provided for operating activities - capital expenditure - dividend paid = $155793000-$132280000-$5000000 = $18513000

6 0
4 years ago
The ________ statement of a business report provides a clear description of the situation that created the need for the report.
Blababa [14]

Answer:

Problem statement

Explanation:

Problem statement - it is referred to as the statement that given the clear and crystal information about the current situations. it is considered a good source of analyzing the real situations about the ongoing project.

This statement describes the current situations between the current and desired aim of the projects. it expressed the problem in two or three statements.

3 0
3 years ago
President bill clinton attempted to protect american firms from foreign competition by placing a government tax on japanese auto
lukranit [14]

C.  A tariff

Tariffs are taxes imposed on imported foreign goods and are designed to encourage people to buy domestic products

6 0
4 years ago
Read 2 more answers
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