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ivann1987 [24]
3 years ago
13

Which of the following statements regarding a 20-year (240-month) $225,000, fixed-rate mortgage is CORRECT? (Ignore taxes and tr

ansactions costs.)a. The outstanding balance declines at a slower rate in the later years of the loan's life.b. The remaining balance after three years will be $225,000 less one third of the interest paid during the first three years.c. Because it is a fixed-rate mortgage, the monthly loan payments (which include both interest and principal payments) are constant.d. Interest payments on the mortgage will increase steadily over time, but the total amount of each payment will remain constant.e. The proportion of the monthly payment that goes towards repayment of principal will be lower 10 years from now than it will be the first year.
Business
1 answer:
ira [324]3 years ago
5 0

Answer:

c. Because it is a fixed-rate mortgage, the monthly loan payments (which include both interest and principal payments) are constant

CORRECT The interest will decrease while principal increase leaving a net effect of zero through the life of the loan

Explanation:

a. The outstanding balance declines at a slower rate in the later years of the loan's life

FALSE the principal decreases at a higher rate in the lather years as the interest component decreases.

b. The remaining balance after three years will be $225,000 less one third of the interest paid during the first three years

FALSE to know this we need to know the rate

d. Interest payments on the mortgage will increase steadily over time, but the total amount of each payment will remain constant

FALSE as a portion of the principal is being paid, the interest component decreases over time

e. The proportion of the monthly payment that goes towards repayment of principal will be lower 10 years from now than it will be the first year.

FALSE the porportion to pay the principal increase through time.

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Josh's weekly budget for lunch is $24. He eats only pizza and burgers. Each pizza costs $6 and each burger costs $3. Josh knows
egoroff_w [7]

Answer:

The answer is: Josh's utility maximizing point is when he buys 2 pizzas and 4 burgers.

Explanation:

If Josh gets equal marginal utility per dollar spent when buying one pizza and 2 burgers, that means that every pizza and every burger give Josh 10.67 utility unit per dollar spent. So Josh can obtain maximum 16 units of utility with his budget and his purchasing options (= $24 x 0.67 units of utility per dollar). The way he can maximize his utility is by buying two packs of one pizza and two burgers per pack, since every pack will give him 8 units of utility.

8 0
3 years ago
Westford Corporation has $185 million dollars of interest-bearing debt outstanding at the end of fiscal 2014 year. In addition,
Ratling [72]

Answer:

B) 9.1%

Explanation:

Cost of debt is the interest rate paid by a company due to borrowing money; i.e  debt from investors.

$185million in debt is the face value of debt that Westford Corporation had and the $26 million dollars of interest expense is the cost of the debt in dollars;

First, find pretax cost of debt ;

Pretax cost of debt = (Interest expense / Face value of debt )*100

= (26,000,000/ 185,000,000 )*100

=0.1405 *100

= 14.05%

Next, use pretax cost of debt to find after-tax cost of debt;

After-tax cost of debt = Pretax cost of debt (1-tax)

= 14.05% *(1-0.35)

= 9.13%

Therefore, Westford's cost of debt capital is 9.1%

6 0
3 years ago
The Federal Reserve conducts a $15 million open-market purchase of government bonds. If the required reserve ratio is 20 percent
Soloha48 [4]

Answer:

$200 million

$30 million

Explanation:

When the requiredreserce ratio is 15 percent or 0.15 , then the money multiplier is (1 / required reserve ratio) or (1/0.15 = 0.67)

Now, change in money supply = money multiplier * open market purchase of government bonds.

Here , the Federal Reserve a $30 million open market purchase Of govemment bonds.

As a result of this;

Money Supply increases by (6.7 * $30 million) = $200 million.

This is the maximum amount the money supply could Increase.

Now, if the bank holds. $30 million as excess reserves, then money supply could increase by as much as $30 million. This is the smallest amount themoney supply could increase.

So, If the required reserve ratio is 15 percent the largest possible increase in the money supply that could result is $200 million- and the smallest possible increase is $30 million.

8 0
3 years ago
Since the beginning of the twentieth century, the United States has experienced _________ recessions. Of those, ______ have occu
faltersainse [42]

Answer: 22; 7

Explanation;

A Recession refers to the economy of a country contracting for at least 2 quarters.

Since the the beginning of the twentieth century, the United States has experienced<u> 22 recessions </u>with the worst being the Great Depression of 1929 and the Great Recession of 2008.

Of those,<u> 7 have occurred since 1970</u> with the 7th ongoing as a result of the Corona virus pandemic.

5 0
3 years ago
Suppose you own a restaurant were does the revenue come from
son4ous [18]
Revenue per hour of labor
8 0
3 years ago
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