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Alona [7]
3 years ago
7

Assume that you have a balance of $4000 on your credit card and that you make no more charges. If your APR is 23.9% and each mon

th you make only the minimum payment of 5% of your balance, then when is the first time that the balance would be less than $100?
Business
2 answers:
KatRina [158]3 years ago
6 0

Answer:

The balance will be less than $100 after 44 months payment

Explanation:

In this question, we are asked to calculate the time at which the Balance on a credit card would be less than $100.

To calculate this, we proceed as follows;

The monthly Interest rate = 23.9%/12 = 1.99166667%

Balance after t months = Credit Card balance * [(1 + Monthly interest rate ) * (1- Minimum payment rate)]^t

The credit card balance is $4,000, and the minimum payment rate is 5%

We plug these values into the equation to get;

$4,000 * [(1+1.99166667%) * (1 - 5%)]^t

= $4000 *[1.0199166667 * 0.95]^t

= $4000 * (0.968920836)^t

Balance after t months < 100

$4,000 * (0.968920836)^t < 100

(0.968920836)^t < 0.025

t = 43.9 months = 44 months

lbvjy [14]3 years ago
5 0

Answer: The balance will be less than $100 after 44 months.

Explanation:

We are to calculate the time when the balance on a credit card would be less than $100.

We were given the following:

APR = 23.9%

Monthly Interest rate will therefore be:

23.9%/12 = 1.99% or 0.0199

Credit card balance = $4,000

Minimum payment rate = 5% or 0.05

The formula is given as:

Balance after t months = Credit Card balance x [(1 + Monthly interest rate ) x (1- Minimum payment rate)]^t

Therefore:

$4,000 x [(1+0.0199) x (1 - 0.05)]^t

= $4000 x [1.0199 x 0.95]^t

= $4000 x (0.97)^t

Balance after t months < 100

= $4,000 x (0.97)^t < 100

= (0.97)^t < 100/4000

= (0.97)^t < 0.025

t = 43.9 months

t is therefore approximately 44 months.

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Learn more about auditors here: brainly.com/question/26048609

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3 0
1 year ago
The stock of Business Adventures sells for $50 a share. Its likely dividend payout and end-of-year price depend on the state of
Delvig [45]

Answer:

Holding period return = 14.49%, Standard Deviation = 11.08 approx

Explanation:

Eco Scenario    Dividend     Stock Price  HPR    Prob     Expected HPR

Boom                         3                 60         26        0.33        8.58

Normal                       1.2               58        18.4       0.33       6.072

Recession                  0.75            49        (0.5)      0.33      <u> (0.165)</u>

              Expected HPR                                                       14.49%

<u>Calculation Of Standard Deviation</u>

                                      (A)                     (B)           (A) - (B)  

P_{1}          P_{0}       D_{1}       Given return   Exp return       d          p           p.d^{2}

60        50      3            26                     14.49         11.51       0.33      43.718    

58        50      1.2          18.4                   14.49         3.91       0.33      5.045

49        50      0.75      (0.5)                    14.49        14.99     0.33      <u> 74.15</u>

                                                                                         Total p.d^{2} =  122.91

wherein, d = deviation

               p = probability

               Standard Deviation = \sqrt{Total\ p.d^{2} }  = \sqrt{122.91} = 11.08  

<u></u>

<u>Working Note</u>:

Holding period return = \frac{P_{1}\ -\ P_{0} \ +\ D_{1}  }{P_{0} }

Boom = \frac{60\ -\ 50 \ +\ 3  }{50 }   = 26%

Similarly, for normal = \frac{58\ -\ 50 \ +\ 1.2  }{50 }  = 18.4%

Recession = \frac{49\ -\ 50 \ +\ 0.75  }{50}  = (0.5)%

figure in bracket indicates negative return

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Answer:

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Explanation:

Accounts receivable balance = $77,000

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Provision for bad debt under the % of receivables approach = $9,240

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Answer:

I. In order to entice a customer to keep damaged or defective merchandise, the seller is willing to decrease the selling price.

II. The seller wants to avoid future lost sales.

III. The seller wants to keep a customer happy.

IV. Sold merchandise was defective or unacceptable.

Explanation:

Sales allowance can be defined as a reduction in the price of goods that a seller gives to a customer due to quality issues, incorrect pricing, shipping, etc.

The statements which best summarize why a seller would give a sales allowance are;

I. In order to entice a customer to keep damaged or defective merchandise, the seller is willing to decrease the selling price.

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