Bob and mary are financing $180,500 for a new home. their lender will approve an interest rate of 5% if bob and mary pay two discount points at closing. Cost them is $3,610.
A discount point is 1% of the loan amount. Bob and Mary are paying two points (or 2% of $180,500), which is $3,610.
What is discount points?
- Discount points are a shape of paid ahead of time intrigued that contract borrowers can buy to lower the intrigued rate on their consequent month to month payments.
- Discount points are a one-time expense, paid up front either when a contract is to begin with orchestrated or amid a refinance.
- Each markdown point for the most part costs 1% of the overall credit and brings down the loan’s intrigued rate by one-eighth to one-quarter of a percent.
- Points don’t continuously got to be paid out of the buyer’s stash; they can some of the time be rolled into the advance adjust or paid by the vender.
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Here is a present value equation which is a geometric sequence
i = monthly int rate
v = 1/(1+i)
20 yr loan (240 months)
<span>155,000 = P(v + v^2 + ...v^240)
</span>
15 yr loan (180 months)
<span>155,000 = P(v + v^2+ ...v^180)
</span>Use formula for sum of geometric series:
<span>Sn = v + v^2 + ...vn = <span><span>v(1−vn) / </span><span>1−v
</span></span></span><span>
Now you can find the monthly payments for each loan.
Multiply the payment by length of loan to get total payment, subtract loan amount to get total interest paid.
The answer would be </span><span>$40,013.40.</span>
Answer:
Explanation:
a. Provide the journal entry for the vacation pay
Employees earned vacation pay of $39,500 for the period.
Debit Credit
Vacation pay expense A/C $39,500
Vacation payable A/C $39,500
<em>(Being vacation pay accrued for periods) </em>
b. Provide the journal entry for the pension benefit.
9% of employee salaries and the salaries were $750,000
=> The pension plan requires a contribution to the plan administrator: $750,000*9% = $67,500
Debit Credit
Pension expense $750,000
To cash A/C $67,500
To unfunded pension liabilities $683,500
Hope it will find you well.
Answer: increase in inventory
Explanation:
increase in inventory : An increase in a company's inventory shows that the company bought more goods than it has sold. And the buying of additional inventory requires the use of cash, it means there was an additional outflow of cash. An outflow of cash has a negative effect on the company's cash balance.
Answer:
D. The amount of one product that must be given up to produce one more unit of another product.
Explanation:
Opportunity cost is defined as the potential benefits that you would recieve if you choose one option over another. This is an economic term that can easily be applied in our day to day lives: Ex. When you choose to study over work, the opportunity cost is represented by the money you could earn as payment for your work.
In business, companies must decide whether they produce a wide range of products or services or if they focus their resources in producing those products in which they are more efficient and would represent higher earnings.
