A student takes out a $10,000, 10-year loan with two possible repayment plans, (i) immediate repayment or (ii) a grace period during the college years. The student takes 5 years to graduate. The interest rate is 8%, compounded annually and the loan is paid off as a yearly lump sum. Since the bank is a for-profit business (beholden to its shareholders and required to maximize profit), the bank intends to receive the same return on this loan either way. How much are the annual payments under option (i) and option (ii)

Answers

Answer 1

Answer and Explanation:

The calculation is given below:

(i) Immediate Repayment:

Let us assume the annual repayments be $ P

So

$10,000 = P × (1 ÷ 0.08) × [1 - {1 ÷ (1.08)^(10)}]

$10,000 = P × 6.71008

P = $10,000 ÷ 6.71008

= $1490.3

(ii) Grace Period of 5 years:

Let us assume the annual repayments be $N

Now  

Accumulated Loan Value after 5 years is

= $10,000 × (1.08)^(5)

= $14,693.3

So, $14,693.3 = N × (1 ÷ 0.08) × [1-{1 ÷ (1.08)^(10)}]

$14,693.3 = N × 6.71008

N = 14693.3 ÷ 6.71008

= $2189.74


Related Questions

External costs occur because Group of answer choices Private costs do not reflect the full costs to society All costs are absorbed by the firm Firms make a choice other than the most cost-efficient production method Government failure increases costs for the firm

Answers

Answer:

Private costs do not reflect the full costs to society

Explanation:

External costs are costs incurred by third parties not involved in production or consumption activities

external cost can either be negative or positive

A good has negative externality if the costs to third parties not involved in production is greater than the benefits. an example of an activity that generates negative externality is pollution. Pollution can be generated at little or no cost, so they are usually overproduced.

A good has positive externality if the benefits to third parties not involved in production is greater than the cost. an example of an activity that generates positive externality is research and development. Due to the high cost of R & D, they are usually under-produced.

Describe the main procedures of running a successful meeting​

Answers

The Three Rules of Running a Meeting. Set the Agenda. ...

Control the Meeting, Not the Conversation. Let Them Speak. ...

Make Meetings Essential. Do a Meeting Audit.

Maria is 30 years old and has a nest egg of $25,000 that she worked hard to save
through her twenties. She would like to invest the money in order to have a down
payment for a home by the time she is 35.
How would you recommend Maria invest her money?

Answers

Answer:

Since Maria is 30 years old and has a nest egg of $ 25,000 that she worked hard to save through her twenties, and she would like to invest the money in order to have a down payment for a home by the time she is 35, I I would give her the following recommendation:

Given that the S&P 500 index fund has an average annual return of 10% to 15%, with positive returns almost guaranteed and considerably low risk, and that Maria has money that is not an excessively high amount and wants to allocate it For a purpose that implies the need for a certain investment security, I would recommend investing that sum in the aforementioned index fund.

How does marketing satisfy your needs as a college student? Are certain aspects of your life influenced more heavily by marketing than others? Provide examples

Answers

Yea dude’s iiiiiiiiiiiiiiiiiiiiiiii

The benefit the goverment receives from tax can be measured by

Answers

Answer:

the change in the equilibrium quantity of the good. the change in the equilibrium price of the good.

Explanation:

The benefit that government receives from a tax is measured by a. b. c. d. the change in the equilibrium quantity of the good. the change in the equilibrium price of the good.

The revenue or benefits received from tax by the government of a Country can be measured by using the Tax-to-GDP ratio.

The Tax-to-GDP ratio provides an in-depth knowledge of the revenues generated from tax by the nation as it relates to the economy.

This ratio helps to pinpoint the benefits from taxation with relation to the size of the nations economy. for instance, if their is higher revenue from tax, it means that the Country can spend more money healthcare, education or infrastructure.

Hence, the Tax-to-GDP ratio, measures the benefit from tax in a nation, and a higher tax revenue of a nations gross domestic product (GDP) signifies economic growth.

You can get more insight about taxes here https://brainly.com/question/15090055?referrer=searchResults

a. The owner of Central Cupcake Shop finds that when she doubles the amount of flour she buys, but makes no other changes, cupcake output rises by 60%. This is an example of

Answers

Answer:

decreasing marginal returns

Explanation:

In this scenario, the owner of Central Cupcake Shop discover that when she doubles the amount of flour she buys without making additional changes, her cupcake output rises by 60%. This is an example of decreasing marginal returns.

An individual or a firm can internalize an externality by​ ___________. A. disputing that an externality exists. B. doubling the size of the externality. C. paying the cost of the externality. D. ignoring the externality.

Answers

Answer:

C. paying the cost of the externality

Explanation:

An externality is defined as cost or benefit that is generated from the activities of a producer, but it is not financially incurred by the producer.

It can be positive or negative externality.

For example if we have a street light the effect on the society does not affect the producer cost wise so it is an externality to him.

When a producer now bears the cost of an externality he is internalizing the externality.

For example if a company polluted the environment with a byproduct of its production process this is a negative externality.

They can internalise it by cleaning up the pollutant from the society.

The purposeful use of symbols to allow multiple interpretations of messages is called:____.
a. strategic ambiguity.
b. crisis communication.
c. interaction management.
d. conflict management.
e. customer service management.

Answers

Answer:

a. strategic ambiguity.

Explanation:

The use of strategic ambiguity permits the views for diversify or interpretations also at the same time it promotes inclusiveness and unity

The mission and vision sttaement should be confused and normal in nature in order to provide the accomodation

So the use of symbols for permitting out the multiple interpretations of messages is known as the strategic ambiguity

Therefore the option a is correct

DESC
1. How much time, in seconds, does it take to complete one cycle of 60 Hz electric power?
A. 1 second
B. 1/60 second
c./3 second
D. V/120 second

Answers

Answer:

[tex]B) \ \frac{1}{60} \ second[/tex]

Explanation:

Given;

frequency, F = 60 Hz

number of cycles, n = 1

Frequency is defined as the number of complete cycles per seconds.

Mathematically, it is expressed as follows;

[tex]F = \frac{n}{t} \\\\where;\\t \ is \ the \ time \ taken \ to \ make \ the \ complete \ cycle \ (seconds)\\\\t = \frac{n}{F} \\\\t = \frac{1}{60} \ second\\\\The \ correct \ answer \ is \ \ (B) \ \frac{1}{60} \ second[/tex]

Therefore, the time taken to make a cycle of 60 Hz is ¹/₆₀ s

A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be

Answers

Answer:

1. $25,000

2. $27,000

Explanation:

Here is the complete question :

A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $1000. Each year after that, you will receive a payment on the anniversary of the last payment that is 8% larger than the last payment. This pattern of payments will go on forever. If the interest rate is 12% per year,

a. what is today’s value of the bequest?

b. what is the value of the bequest immediately after the first payment is made?

a. Value today = value of payment /( interest rate - growth rate)

$1000 / (12% - 8%)

$1000 / (0.12 - 0.08)

$1000 / 0.04

= $25,000

b. Value today = [value of payment x ( 1 + growth rate)]  /( interest rate - growth rate)

(1000 x 1.08)  / (0.12 - 0.08)

1080 / 0.04

= 27,000

You are holding a stock that has a beta of 1.91 and is currently in equilibrium. The required return on the stock is 25.60%, and the return on the market portfolio is 17.10%. What would be the new required return on the stock if the return on the market increased to 21.00% while the risk-free rate and beta remained unchanged

Answers

Answer:

Hence the new required return on the stock if the return on the market increased to 21.00% while the risk-free rate and beta remained unchanged is 33.05%.

Explanation:

non-employees are allowed in the store before the store opens and after closing time

Answers

the answer is false

Answer:

the answer is also no

Explanation:

this is because they do not work there and have no business there

Given the following data: Beginning raw materials inventory $30,000 Materials purchased 65,000 Ending raw materials inventory 40,000 What is the amount of raw materials used? a.$5,000 b.$55,000 c.$30,000 d.$75,000

Answers

Answer:

Option "b"$55000 is correct.

Explanation:

Below is the given values:

Starting raw material = $30000

Pruchased material = $65000

Raw material at the end = 40000

Now calculate the raw material used:

Raw material used = Starting raw material  + purchases - ending raw material

Raw material used = 30000 + 65000 - 40000

Raw material used = 95000 - 4000

Raw material used = $55000

Thus option "b"$55000 is correct.

The law of comparative advantage says that a person should produce a good if he or she: Group of answer choices can produce the good at the same cost as another producer can. receives the highest marginal benefit from the good. has an absolute advantage in producing the good. has the lowest opportunity cost of producing the good. has the greatest desire to consume the good.

Answers

Answer:

has the lowest opportunity cost of producing the good

Explanation:

Comparative advantage is the capability of the one party in order to manufactured the goods or services at less opportunity cost as compared to the other party. It could be used for overall nations and thier economies

So as per the given situation, the above statement represent an answer

hence, the same is to be considered

Determine the amount to be paid in full settlement of each purchase invoice, assuming that credit for returns and allowances was received prior to payment and that all invoices were paid within the discount period. Merchandise Freight Paid Returns and by Seller Freight Terms Allowances a. $11,000 $260 FOB shipping point, 1/10, net 30 $1,100 b. $4,200 $101 FOB destination, 2/10, net 45

Answers

Answer:

a. The total cost is:

= ((Cost of goods - Returns) * discount factor) + Freight paid by seller

= ( (11,000 - 1,100) * (1 - 1%)) + 260

= 9,900 * 99% + 260

= $10,061

Note: When shipping is FOB Shipping point, freight is paid by buyer. Discount terms of 1/10 means that a discount of 1% is allowed if settlement is done within 100 days.

b. Total Cost is:

= ( Cost of goods - Returns) * Discount factor

= 4,200 * (1 - 2%)

= $4,116

Note: When shipping is FOB Destination, freight is not paid by buyer. 2/10 discount means 2% discount if settled in 10 days.

Tiny Town Kennel earns service revenue by caring for the pets of customers. Tiny Town Kennel is organized as a sole proprietorship and owned by Earle Martin . During the past​ month, Tiny Town Kennel has the following​ transactions: LOADING... ​(Click the icon to view the​ transactions.) Indicate the effects of the business transactions on the accounting equation for Tiny Town Kennel. Transaction​ (a) is answered as a guide. a. Received $ 520 cash for service revenue earned.​ (Transaction (a) is answered as a​ guide.) a. Increase asset (Cash) ; Increase equity (Service Revenue) b. Paid $ 325 cash for salaries expense.

Answers

Answer:

Paid $325 cash for salaries expense ⇒ Decrease asset (Cash); Decrease in Equity (Expenses)

Assets are reduced because the money used to pay for the salaries came from cash and cash is an asset. Assets will therefore be credited.

Equity also reduces because expenses come out operating income which is part of Equity. Equity will be debited as it is debited when it decreases.

Which of the following is one of the value gaps that can undermine customer experiences and can damage relationships?

Service Quality Gaps
Psychological Gaps
Language Gaps
Physical Gaps
Operational Gaps
Transition Gaps

Answers

Answer:

Service Quality Gaps

Explanation:

Service Quality gaps is one of the value gaps that can undermine customer experiences and can damage relationships.

This is because, as a result of the quality of the service delivered or rendered, a customer's satisfaction can be gauged and depending on how satisfied the customer is, it could build or damage relationships.

For February, sales revenue is $250,000; sales commissions are 6% of sales; the sales manager's salary is $50,000; advertising expenses are $15,000; shipping expenses total 1% of sales; and miscellaneous selling expenses are $1,000 plus 1/2 of 1% of sales. Total selling expenses for the month of February are:_______.
a. $65,000.
b. $69,750.
c. $82,250.
d. $84,750.

Answers

Answer:

d. $84,750.

Explanation:

Calculation to determine what Total selling expenses for the month of February are:

Sales commissions $15,000

($250,000 ×6%)

Sales manager's salary $50,000

Advertising expenses $15,000

Shipping expenses $2,500

($250,000 × 1%)

Miscellaneous selling expense $2,250

[$1,000 + ($250,000 × 0.5%)]

Total selling expenses $84,750

Therefore Total selling expenses for the month of February are:$84,750

Marion Cosmetics decides to launch a cream with a claim that it makes skin "10 times smoother and reduces wrinkles by 90%. The claim is based on a study of 30 respondents who used products of other brands as well. However, a second study on a larger sample reveals only a mild correlation between the use of the cream and smoother skin and reduction in wrinkles.

Required:
In these circumstances, what is the most ethical approach that Marion Cosmetics can follow?

Answers

Answer:

It should report the result as it is, or improve the product to match its claim.

Explanation:

In the given situation, it is mentioned that cosmetics decided to introduce the cream with a claim that it makes the skin ten times smoother and decreased wrinkles by 90% also it is depend upon the 30 respondents

But the second study shows that there is a large correlation lies between the usage of the cream & smoother skin & decrease in wrinkles

So the most ethical approach is that it should be reported in the same way or it can be improved the product in order to match its claim

What are the challenges that Vietnamese Businesses Face Due to Warehouse Locations in Industrial Parks

Answers

The challenges that Vietnamese businesses have to face or facing due to the warehouse locations are described below. Firstly we have to describe the warehouse locations.

The Warehouse locations in Industrial parks:

Vietnam has designated and developed several office buildings as well as regions throughout order to attract foreign investors. Vietnam's development projects are located throughout the kingdom's northwestern part.

Warehouse placement across the industrial parks presents several challenges such as:

As of now, the coordinating structure has always been in the creation stage. Supplementary time is required for coordinates.It seems to have a direct influence on either the accumulation as well as transportation, and perhaps even the expense of the action itself.

Learn more about Vietnamese businesses here:

https://brainly.com/question/11337644

In applying the lower of cost or market method to LIFO inventory valuation, market is defined as: A. Historical cost. B. Current replacement cost. C. Current sales price. D. FIFO. E. LIFO.

Answers

Answer:

b

Explanation:

LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.

FIFO means first in, first out. It means that it is the first purchased inventory that is the first to be sold

A business provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimated amount of the current year's vacation pay is $42,000.
a- Journalize the adjusting entry required on January 31, the end of the first month of the current year, to record the accrued vacation pay.
b- How is the vacation pay reported on the company's balance sheet? When is this amount removed from the company's balance sheet?

Answers

Answer:

ill try but imma be wrong

Job analysis is important to HR managers because the information gathered in job analysis is used in so many HR activities/functions. Describe how job analysis information is used in four different HR activities/functions. Illustrate by specific examples in hospitality and tourism.

Answers

Answer:

Job analysis in tourism and hospitality include planning, making and providing, lodging recreation and travel related services.

Explanation:

Job analysis is a part of the procedure to identify the contents of the job interms of the acts involved and it provides information to the organization necessary to perform these activities. Procedure involves collecting of information. Being both task and work oriented.

What are the macroeconomic conditions affecting the IT industry? Select "yes" for those statements that are accurate and choose "no" for those that are not.

a. From a political perspective, Ricoh should be aware of regulations from ITAC (Information Technology Association of Canada) who is actively promoting and supporting the expansion of the IT services industry in Canada as this move will likely impact Ricoh in many ways.
b. From an economic perspective, Canada enjoys a strong economy with a strong GDP growth.
c. Low oil prices are causing turmoil in business investment in western Canada, leading to a negative impact for the economic component of the macro-environment.
d. A weak Canadian dollar makes the cost of importing more expensive.

Answers

Answer:

a. From a political perspective, Ricoh should be aware of regulations from ITAC (Information Technology Association of Canada) who is actively promoting and supporting the expansion of the IT services industry in Canada as this move will likely impact Ricoh in many ways.   - Yes

b. From an economic perspective, Canada enjoys a strong economy with a strong GDP growth.  -  Yes

c. Low oil prices are causing turmoil in business investment in western Canada, leading to a negative impact for the economic component of the macro-environment.  -  Yes

d. A weak Canadian dollar makes the cost of importing more expensive. - No

Explanation:

The macroeconomic conditions that impact the business in terms of the economic growth rate. The use of GNP and GDP to measure the growth. The macroeconomic phenomenon estates the patterns and conditions from the large aspects of the economy.

The following information is available for Ethtridge Manufacturing Company for the month ending July 31:

Cost of direct materials used in production $147,700
Direct labor 177,200
Work in process inventory, July 1 66,500
Work in process inventory, July 31 90,100
Total factory overhead 81,200

Required:
Determine Ethtridge's cost of goods manufactured for the month ended July 31.

Answers

Answer:

the cost of goods manufactured is $382,500

Explanation:

The computation of the cost of goods manufactured is shown below:

Cost of direct materials used in production $147,700

Direct labor 177,200

Work in process inventory, July 1 66,500

Total factory overhead 81,200

Less:

Work in process inventory, July 31 90,100

Cost of goods manufactured $382,500

Hence, the cost of goods manufactured is $382,500

c) Tình hình SX của DN Y trong năm báo cáo như sau:
Chỉ tiêu Quý I Quý II Quý III Quý IV
1. GTSX(Tr.đ) 2.515 2.616 2.716 2.908
2. Số LĐ đầu quý 99 101 103 105
Được biết số LĐ cuối IV là 107 người
Yêu cầu: - Tính GTSX bình quân năm báo cáo?
- Mức NSLĐ bình quân mỗi quý của 1 lao động?
- Mức NSLĐ bình quân hàng quý của 1 lao động?
- Mức NSLĐ bình quân của cả năm của 1 lao động?

Answers

Can you put this in English please

a.If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment of 2 percent, seasonal unemployment of 0.5 percent, and cyclical unemployment of 2 percent, what is the natural rate of unemployment

Answers

Answer: 4%

Explanation:

The natural rate of unemployment is the sum of the frictional and structural unemployment rate because these represent the unemployment that a country would still experience even if it was at full employment and the actual GDP was equal to its Potential GDP.

Natural unemployment rate = Frictional unemployment + Structural unemployment

= 2% + 2%

= 4%

You are buying a laptop and there is two payment plans to consider. Payment plan A is to pay $4,900 now and payment plan B is to pay $500 now and pay $210.30 per month for 30 months. Using an interest of 24%, which payment plan do you choose

Answers

Answer: Plan A has a lower present value and should be chosen.

Explanation:

Choose the one that has the lower present value because that means that it would be cheaper.

Present value of plan A = $4,900

Present value of plan B

= $500 + Present value of $210.30 per month for 30 months

$210.30 is constant so it is an annuity.

Periodic interest rate = 24%/12 = 2%

Present value of annuity = Annuity *  ( 1 - (1 + rate)^-number of periods) / rate

= 210.30 *  ( 1 - (1 + 2%)⁻³⁰) / 2%

= $4,709.97

Present value of plan B = 500 + 4,709.97

= $5,209.97

Choose Plan A because it has a lower present value.

A company purchased property for a building site. The costs associated with the property are given below.
Purchase price = $175,000
Real estate commissions = $15,000
Legal fees = $800
Expenses of clearing the land = $2,000
Expenses to remove old building = $1,000
1. What portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building?
2. Prepare the journal entry to record these costs.

Answers

Answer:

1. Land $193,800

Building $0

Explanation:

1. Calculation to determine what portion of these costs should be allocated to the cost of the land and what portion should be allocated to the cost of the new building

Purchase price $175,000

Real Estate commissions $15,000

Legal fees $800

Expenses of clearing the land $2,000

Expenses to remove old building $1,000

Total $193,800

Therefore the total cost of the land is $193,800 and NO cost will be allocated to the cost of the new BUILDING

2. Preparation of the journal entry to record these costs

Dr Land A/c $193,800

Cr Cash A/c $193,800

(Being land purchased for cash and the associated expenses being recorded)

The top part of Rammy's Inc.'s 2018 balance sheet is listed as follows (in millions of dollars). Current assets: Current liabilities: Cash and marketable securities $ 5 Accrued wages and taxes $ 6 Accounts receivable 15 Accounts payable 10 Inventory 95 Notes payable 50 Total $ 115 Total $ 66 What are Mars, Inc.'s current ratio, quick ratio, and cash ratio for 2018?

Answers

Answer:

Rammy's Inc or Mars, Inc

Current ratio

= 1.74

Quick ratio

= 0.3

Cash ratio

= 0.076

Explanation:

a) Data and Calculations:

Current assets:                                     Current liabilities:

Cash and marketable securities $ 5   Accrued wages and taxes $ 6

Accounts receivable                      15   Accounts payable                10

Inventory                                       95   Notes payable                     50

Total                                          $ 115   Total                                  $ 66

Current ratio = Current assets/Current liabilities

= $115/$66

= 1.74

Quick ratio = Current assets - Inventory/Current liabilities

= $20/$66

= 0.3

Cash ratio = Cash and marketable securities/Current liabilities

= $5/$66

= 0.076

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