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nika2105 [10]
2 years ago
14

Suppose that Kathy uses her credit card to cover her expenses and pay her bills. She accumulates a balance of $12,500 at an annu

al interest rate of 21%. Determine the future value of the total amount she will have to repay, if she takes 6 years to pay it off. Briefly, explain how excessive credit usage can’t lead into financial burden or default on your loans. (Show your work)
Business
1 answer:
PolarNik [594]2 years ago
8 0

Answer:

$39,230.35

Explanation:

Balance = $12,500

Rate of Interest = 21%

Duration to repay = 6 years

Future pending amount =[12,500 * (1 + 0.21)^6]

Future pending amount = 39,230.35

Thus, Kathy have to repay $39,230.35 at the end of 6 years.

Excessive credit usage would not lead to default on your loans because credit card companies offer loan when you maintain a healthy balance sheet which means you maintain a specific amount in your account always which can repay the loan easily. Keeping extra money in your account reduce the probability that customers default on loans.

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What are the four components used to calculate Gross Domestic Product
sesenic [268]
<span>Personal consumption expenditures.Investment.Net exports.Government expenditure.</span>
3 0
3 years ago
Barrington Bears has developed the following sales forecasts for the next few months. January 500, February 600, March 720, Apri
Oduvanchick [21]

Answer:

The correct answer is C.

Explanation:

Giving the following information:

Barrington Bears has developed the following sales forecasts for January 500 units.

BB has 80 bears on hand on Dec. 31. The normal ending inventory policy is to hold 20% of next month’s sales.

Direct labor is paid $18 per hour. Each bear takes 40 minutes to hand-finish. Variable overheads total $21 per direct labor hour. Fixed overheads amount to $25,000 per month.

First, we need to calculate the production for January.

Sales= 500 units

Ending inventory= (600*0.2)= 120 units

Beginning inventory= 80 (-)

Total= 540 units

Conversion costs= direct labor + manufacturing overhead

Direct labor= [(40/60)*540]*$18= $6,480

Variable overhead= 21*360 hours= $7,560

Fixed overhead= $25,000

Total conversion costs= $39,040

5 0
3 years ago
Ballard Company reported assets of $500 and liabilities of $200. What amount will Ballard's report for stockholders' equity?
Westkost [7]

Answer:

$300

Explanation:

Data provided in the question

Assets reported = $500

Liabilities = $200

So, Stockholder equity is

= Total assets - total liabilities

= $500 - $200

= $300

By applying the accounting equation, that equal to

Total assets = Total liabilities + owners equity

We can find out the stockholder equity by deducting the total liabilities from the total assets

7 0
3 years ago
Brief Exercise 12-1 Barbara Ripley and Fred Nichols decide to organize the ALL-Star partnership. Ripley invests $27,000 cash, an
Marysya12 [62]

Answer:

The journal entry is as follows:

Cash A/c Dr. $18,000

Equipment (Fair value) A/c Dr. $9,000

           To N's  capital                            $27,000

(To record the investment bought by Nichols)

Workings:

Cash contributed by Nichols = $18,000

Equipment's Book value = $6,300

Fair value of equipment = $9000

Nichols capital = $18,000 + $9,000

                         = $27,000

8 0
3 years ago
Ben and carla covington plan to buy a condominium. they will obtain a $220,000, 30-year mortgage at 5 percent. their annual prop
shtirl [24]

Answer: The total using monthly housing payment is 1371.01.

The monthly payment on a house usually comprises of four parts - principal, interest, taxes and insurance. Even though taxes and insurance are due only once a year, most home loan lenders require that these amounts be deposited in an escrow account . They then transfer the amounts to the respective agency when the amounts fall due. So, the value of monthly payment is:        

Monthly Housing Payment = Principal + Interest + Taxes + insurance

We need to calculate the EMI on the housing loan. This will cover the monthly payment on principal and interest

EMI = \frac{PV}{\frac{1-(1+r)^{-n}}{r}}

EMI = \frac{220000}{\frac{1-(1+\frac{0.05}{12})^{-30*12}}{\frac{0.05}{12}}}

EMI = \frac{220000}{\frac{1 - 0.22382659564135}{0.0042}}

EMI = \frac{220000}{186.28}

EMI = 1181.01

Next we calculate the monthly property taxes and insurance

Monthly property taxes       \frac{1800}{12} = 150

Property insurance             \frac{480}{12} = 40

Hence the total housing payment is : 1181.01 + 150 +40 = 1371.01

3 0
3 years ago
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