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LekaFEV [45]
3 years ago
9

A partially amortizing mortgage is made for $60,000 for a term of 10 years. The borrower and lender agree that a balance of $20,

000 will remain and be repaid as a lump sum at that time. a. If the interest rate is 7 percent, what must monthly payments be over the 10-year period
Business
1 answer:
GarryVolchara [31]3 years ago
4 0

Answer:

The monthly payments will be $464.44

Explanation:

in this problem we are given the present value of the annuity or house which is $60000 - $20000 = $40000 we subtract because the $20000 will be paid as a lumpsum. this will be denoted by Pv.

we are given the period n for this mortgage repayment which is 10 years but its stated that this individual will pay monthly so the period of payments n is 10 x 12 =120 payments will be done.

the interest rate is also given as 7%which is not adjusted over the periodic payments so i is 7%/12 thereafter we find the monthly payments which will be denoted by C in the present value formula :

Pv = C[(1-(1+i)^-n)/i] then we substitute the above mentioned values

$40000=C[(1-(1+(7%/12))^-120)/(7%/12)] then we divide both sides by the value that multiplies C to solve for C the monthly payments.

$40000/[(1-(1+(7%/12))^-120)/(7%/12)] = C, then compute on calculator.

therefore C the montly payments is $464.44

we use the present value annuity as it is a series of periodic payments in the futer for a value given now.

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A car dealer promises to give a $5,000 bonus to the first salesperson who sells 10 cars this week. Which type of contract is thi
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Unilateral contract

Explanation:

According to the given statement in the question, this is a type of a unilateral contract.

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True or false?
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4 0
3 years ago
A company currently has 100 items in inventory. The demand for the next four months is 500, 800, 900, and 300 units. Determine t
eimsori [14]

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The monthly production rate if a level strategy is selected with the goal of ending the fourth month with 400 units in inventory is b. 700 units/month

Explanation:

If the company operates a level production stategy and aims to have 400 units at the ending of the fourth month, then;

Opening inventory will be 100 units and monthly movement will be as follows;

Month     Opening     Demand    Produce     Closing

  1              100            -500           700       =    300

   2            300           -800            700      =    200

   3           200           -900             700       =    0

   4              0            -300              700       =  400

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