Pr 6-3a weighted average cost method with perpetual inventory

Suppose that, for every 1-percentage-point decline in the discount rate, commercial banks collectively borrow an additional $2 b

Mariana [72]

Answer:

reserves will be 0.1 billion

Explanation:

given data

discount rate = 1 %

borrow = $2 billion

reserve ratio = 10%

discount rate= 4.0% to 3.5%

to find out

bank reserves will be

solution

we know here discount rate is 1 % with borrow additional $2 billion and reserve ratio is 10%

and here discount rate is 0.5 % for 4% to 3.5 %

so here we can say bank will borrow $2 billion × 0.5

bank borrow = $1 billion

and

here bank reserves increase that is 10% × $1 billion

so reserves will be 0.10 × $1 billion = 0.1 billion

3 0

4 years ago

Your mortgage is a 30-year fixed at 8% on $150,000. You are considering refinancing at 3.5% fixed for 30 years. The bank charges

Ilya [14]

Answer:

Option A,4 months

Explanation:

Closing fees =1.5% of the mortgage

mortgage amount is $150,000

closing fees =$150,000*1.5%=$2250

The mortgage monthly payment can be computed using the pmt formula in excel as follows:

=pmt(rate,nper,-pv,fv)

rate is the rate per month which is 3.5%/12=0.002916667

nper is 30 years multiplied by 12 =360

pv is the amount of mortgage which is $150,000

fv is the sum of the interest on mortgage and mortgage amount which is unknown

=pmt(0.002916667 ,360,-150000,0)= 673.57

the final answer=closing fees/monthly payment=$2250 /$673.57 = 3.34 months

The closest option is 4 months

8 0

3 years ago

Read 2 more answers

Assuming all APRs equal, the effective interest rate on a loan is highest when:

arlik [135]

Answer:

Points are charged and the loan has a 30 year maturity but prepaid in five years

Explanation:

When you purchase points to lower your monthly mortgage payments, the bank (or lender) sell them calculating a 30 year payment schedule. If you pay the loan in a shorter period, it means that the points were sold at a very high price o you actually end up paying higher effective interest rate. That without even considering any possible prepayment penalties. But sometimes knowing that your mortgage is paid lowers your stress and it may be worth it from a personal (not financial) point of view.

5 0

4 years ago

in chronological order based on the three lessons studied, discuss why it is very important to learn economics in our real world

Elza [17]

I have a lot to say about the president and president for

3 0

3 years ago

Using the information below, calculate net income for the period: Sales revenues for the period $ 1,318,000 Operating expenses f

Vanyuwa [196]

Answer:

Net Income 516,000

Explanation:

Net income = revenue - expenses

sales revenue 1,318,000

COGS (549,000) (A)

Operating expenses <u> (253,000) </u>

Net Income 516,000

(A)

<u>To calculate the COGS we will use the inventory identity</u>

$$$Beginning Inventory + production = Ending Inventory + COGS$

50,000 + 554,000 = 55,000 + COGS

50,000 + 554,000 - 55,000 = COGS

COGS = 549,000

4 0

3 years ago