1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Llana [10]
3 years ago
12

A $25,000 bank loan is to be repaid in equal yearly payments of $2745 over 15 yr at an effective annual interest rate of 7%. The

borrower uses the loan money to earn an annual effective return of 10% in the stock market. All money earned is kept in the stock fund. What is most nearly the present-day value of the earnings over 15 yr as a result of this loan and investment venture
Business
1 answer:
ohaa [14]3 years ago
5 0

Answer:

The present-day value of the earnings over 15 years as a result of this loan and investment venture is:

= $24,998.51.

Explanation:

a) Bank loan = $25,000

Annuity Payment = $2,745 yearly

Period of loan = 15 years

Effective annual interest rate = 7%

Effective annual return = 10%

Future value of $25,000 at 10% for 15 years = $25,000 * 4.1777

= $104,425

The present-day value of $104,425 over 15 years at 10% effective annual return, using an online financial calculator =

N (# of periods) = 15 years

I/Y (Interest per year) = 10 years

PMT (Periodic Payment) = 0

FV (Future Value) = $104,425

Results

PV = $24,998.51

Total Interest $79,426.49

You might be interested in
Last week Sarah Carver worked 4 overtime hours at time-and-a-half pay. Her
MrRa [10]

Answer:

34.80

Explanation:

8.70 times 4 is 34.80

7 0
2 years ago
Read 2 more answers
The optimal capital structure has been achieved when the: debt-equity ratio is equal to 1. debt-equity ratio results in the lowe
icang [17]

The optimal capital structure can be realized if : Debt-equity ratio selected results in the lowest possible weighted average cost of capital.

  • An optimal capital structure can be regarded as best mix of debt as well as equity financing which maximizes a company's market value.

  • And as well minimizing its cost of capital, it can be realized when Debt-equity ratio  that is been selected, gives the lowest possible weighted average cost of capital.

Learn more at:

brainly.com/question/10782180?referrer=searchResults

3 0
2 years ago
On February 20, services valued at $60,000 relating to the organization of a corporation were performed in exchange for 1,000 sh
Ganezh [65]

Answer:

Explanation:

The journal entry is shown below:

On February 20

Organization expense A/c Dr     $60,000

          To  Common Stock A/c $25,000       (1,000 shares × $25)

          To  Paid in capital in excess of par-Common Stock $35,000

(Being the organization expense is recorded and remaining balance is credited to the  Paid in capital in excess of par-Common Stock)

3 0
3 years ago
In the small country of Economerica, there are 6 thousand people employed, 1 thousand people unemployed, and 3 thousand people o
irakobra [83]

Answer: B. 20.00%

Explanation:

Unemployment rate does not include those who have given up on finding a job.

Unemployment rate = Unemployed people / Labor force

Unemployed people:

= Original unemployed + half the new graduates

= 1,000 + (1,000 / 2)

= 1,500 people

Labor force:

= Unemployed + employed people

= 1,500 + 6,000

= 7,500 people

Unemployment rate:

= 1,500 / 7,500

= 20%

3 0
3 years ago
Denise is planning to open a new gym, and she wants to be sure that her employees can move to any open position and do well. Wha
bija089 [108]

the money system is of corse i love the question

3 0
3 years ago
Other questions:
  • Personal finance chapter 5. A Cerificate of desposit will often result in a penalty for withdrawing funds beofre the maturityy d
    14·1 answer
  • What fee may be collected prior to delivering required disclosures?
    9·1 answer
  • The holder of a $1,000 face value bond can exchange the bond any time for 25 shares of stock. Then the conversion ratio:
    9·1 answer
  • Stevens Company's inventory on March 1 and the costs charged to Work in Process—Department B during March are as follows:
    10·1 answer
  • Showcase Co., a furniture wholesaler, sells merchandise to Balboa Co. on account, $254,500, terms n/30. The cost of the goods so
    12·2 answers
  • Brad buys a tablecloth from a department store. When he gets it home, he finds that the color does not go well in his dining roo
    10·1 answer
  • Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The
    9·1 answer
  • Who is ur fav actor , movie star
    14·2 answers
  • Which discipline studies the decision-making process of customers, workers, households, and business firms on an individual basi
    13·1 answer
  • To create and capture customer value, companies must engage the first step of the marketing process, which is __________.
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!