Answer:
The problem with variable rates is that they vary, i.e., they might unexpectedly increase and the increase might be pretty significant. One of the main factors leading to the Great Recession was the housing bubble and the increase in mortgage interest rates. Normally, interest rates tend to increase, they might sometimes decrease, but generally they only go up and up.
Even though the fixed interest rate might be higher, it will not change and that guarantees that you will always pay the same amount and that you can prepare your personal budget to cover it.
Answer:
Dr Accounts payable 1850
Cr Merchandise inventory $37
Cr Cash $1813
Explanation:
Preparation of the journal entry to record the payment on July 12 Using the gross method,
JOURNAL ENTRY
Jul-12
Dr Accounts payable ($2300-450) 1850
Cr Merchandise inventory ($1850*2%) $37
Cr Cash $1813
($1850-$37)
(Being entry recorded for payment to supplier)
Answer:
64,313.74 ; 95,559.38 ; 47,283.11
Explanation:
by definition the present value of an annuity is given by:
where 
is the present value of the annuity, 
is the interest rate for every period payment, n is the number of payments, and P is the regular amount paid. so applying to this particular problem, we have:
1. P=8,200, n=25, i=12%
2. P=8,200, n=25, i=7%
3. P=8,200, n=25, i=17%
Answer:
The amount of the tax on a bottle of wine is $5 per bottle. Of this amount, the burden that falls on consumers is $3 per bottle, and the burden that falls on producers is $2 per bottle. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers.
Explanation:
The amount of the tax on a bottle of wine is $5 ($3 + $2).
The burden on consumers is $3 ($9 - $6), which is the difference between the after-tax purchase price and the before-tax purchase price for consumers. This implies that the burden passed to consumers is $3 out of the total tax burden of $5.
The burden on producers is $2 ($6 - $4) which represents the difference between before-tax selling price and the after-tax selling price for the producers. This means that the burden passed to producers is $2 out of the total tax burden of $5.
If the tax burden were passed to the producers alone, the selling price would have been more than $11 ($6 + 5). This would have reduced demand for wine as consumers would have been forced to bear the total burden. This would have made the tax unequitable. This would have been the case unless demand is inelastic. That means that the total demanded is not sensitive to price increases.
