A borrower can obtain an 80 percent loan with an 8% interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 90 percent loan at an 8.5% rate with the same loan term. The borrower plans to own the property for the entire loan term.

a. What is the incremental cost (%) of borrowing the additional funds? (Hint: the dollar amount of the loan does not affect the answer)

b. How would your answer change if two points were charged on the 90 percent loan?c. Would your answer to part (b) change if the borrower planned to own the property for only ve years?

Answers

Answer 1

Answer:

(a) 12.26037049%

(b)  15.34868967%

(c) 17.9626%

Explanation:

(a)

=  [tex]RATE(12\times 25,PMT(\frac{8.5 \ percent}{12} ,12\times 25,1\times 90 \ percent)-PMT(\frac{8 \ percent}{12} ,12\times 25,1\times 80 \ percent),1\times 90\ percent-1\times 80 \ percent)\times 12[/tex]

=  [tex]12.26037049[/tex]%

(b)

=  [tex]RATE(12\times 25,PMT(\frac{8.5 \ percent}{12} ,12\times 25,1\times 90 \ percent)-PMT(\frac{8 \ percent}{12} ,12\times 25,1\times 80 \ percent),1\times 90 \ percent\times (1-2 \ percent)-1 \times 80 \ percent)\times 12[/tex]

=  [tex]15.34868967[/tex]%

(c)

=  [tex][RATE(12\times 5,-PMT(\frac{8.5 \ percent}{12} ,12\times 25,1\times 90 \ percent)+PMT(\frac{8 \ percent}{12} ,12\times 25,1\times 80 \ percent),-1\times 90 \ percent\times (1-2 \ percent)+1\times 80 \ percent],-[FV(\frac{8.5 \ percent}{12} ,12\times 5,PMT(\frac{8.5 \ percent}{12} ,12\times 25,1\times 90 \ percent),1\times 90 \ percent)]+[FV(\frac{8 \ percent}{12} ,12\times 5,PMT(\frac{8 \ percent}{12} ,12\times 25,1\times 80 \ percent),1\times 80 \ percent))\times 12][/tex]=  [tex]17.9626[/tex]%

Note: percent = %


Related Questions

The idea generating technique most often used in writing business letters is

Answers

Answer:

free writing

Explanation:

which of the following BEST characterizes the first meeting to present the business plan to investors:
a) The presentation should be informal, unrehearsed and avoid using power point slides so it does not appear 'canned'.
b) The presentation should focus on the technology that will go into a new product or service because investors want assurance that the venture is based on sound technology.

Answers

Answer:

B

Explanation:

The presentation should focus on the technology that will go into a new product or service because investors want assurance that the venture is based on sound technology.

What is the function of product and service management? Choose the answer.
2
budgeting for a product development or financing a sale
15
activities or functions associated with promoting and selling a product or service
18
looking at the best ways to meet customers needs
direct communication with customers to help satisfy their purchasing needs

Answers

Answer:

activities or functions associated with promoting and selling a product or service

Explanation:

15 is dah answer

Activities or functions associated with promoting and selling a product or service are the functions of product and service management. The correct option is B.

What is a service management function?

Value delivery to customers and customer relationships are the two main focuses of service management. The interactions of IT technical staff with customers and clients can be organized using the framework provided by service management.

Based on consumer preferences and the state of the market, PSMs guide decisions regarding products and marketing. This prevents businesses from spending money on features they won't actually use. It also aids in marketing by helping to center messaging around the features and advantages that customers have been requesting.

Thus, the ideal selection is option B.

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Required reserves of banks are a fixed percentage of their.

Answers

Required reserves of banks are a fixed percentage of their fixed deposits.

What are required reserves?

Required reserves is the percentage of deposits required of banks to keep as reserves by the central bank. Required reserves are used to control the amount of loans a bank can give out. This in turn affects the money supply in the economy.

Reserves are also needed to meet unforeseen circumstances.

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2) Match the scenarios with the ethical frameworks. Certain-Tees, Inc., executives believe in absolute values including the wise use of resources and fair treatment of employees. Therefore, they only sell T-shirts made of natural, renewable resources and require suppliers to follow strict guidelines in caring for employees. The goal of Sahara, Inc., is to become the world's largest online retailer. This will create many new jobs and provide a good return to investors. The owners of Positron Auto Parts rely heavily on cultural aspects to define ethical practices in each country where the company operates. Perfect Paper executives focus on keeping costs low in order to provide paper towels and toilet paper to all Americans at affordable prices.

Answers

Explanation:

1. As in the case of Certain-Tees, Inc., their approach follows The Fairness or Justice ethical framework. This ethical framework involves the basic belief that everyone or everything should be treated or done fairly.

2. As in the case of  Sahara, Inc., and Perfect Paper executives, their approach follows the Utilitarian ethical framework. Which is the belief in doing what brings the greatest or most good to the majority.

3. As in the case of Positron Auto Parts, their approach follows The Common Good ethical framework, which relies heavily on cultural aspects to define ethical practices.

Exhibit 14-2 A $500,000, ten-year, 7% bond issue was sold to yield 6% interest payable annually. Actuarial information for 10 periods is as follows: 6% 7% Present value of 1 0.50835 0.55839 Present value of an annuity of 1 7.02359 7.36009 Refer to Exhibit 14-2. The discount or premium at the date of bond issuance would be: ______.
a. $36.798 premium
b. $10,097 discount
c. $35,117 discount
d. $11.778 premium

Answers

Based on the price of the bond, the coupon rate and the interest, the premium on the bond at issuance would be a. $36.798 premium.

What is the price of the bond?

This can be found as:

= (Coupon x Present value of an annuity 10 years, 6%) + (Face value of bond x Present value factor, 10 years, 6%)

Coupon is:

= 7% x 500,000

= $35,000

Solving for price is:

= (35,000 x 7.36009) + (500,000 x 0.55839)

= $536,798.15

What is the premium?

Because the current selling price is higher than the face value, the bond is said to be trading at a premium of;

=536,798.15 - 500,000

= $36,798

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define economics according to adam Smith .​

Answers

Smith defined economics as “an inquiry into the nature and causes of the wealth of nations.”

a straight line passes through the point (3,7) and its Y intercept is 5 times that of X intercept find its equation​

Answers

Explanation:

usual line equation :

y = ax + b

a being the slope (the ratio "y coordinate change / x coordinate change" when going from one point on the line to another). and b being the y intercept (the y value when x = 0).

the x intercept is the x value when y = 0.

so,

y = a×0 + b = b

and

0 = ax + b

ax = -b

x = -b/a

b = 5 × -b/a

we have the 2 points (0, b) and (-b/a, 0).

the slope is then (b-0)/(0 - -b/a) = (-5b/a)/(b/a) = -5

to get b we use the given point in the line equation :

y = -5x + b

7 = -5×3 + b = -15 + b

22 = b

so, the full line equation is

y = -5x + 22

3
Select the correct answer.
Drafters create plans to help others implement their designs.
OA.
True
OB.
False
Reset
Next

Answers

Answer:

False

Explanation:

Did it on edg 2020

________ provide(s) a methodology and tools for dealing with the organization's ongoing need to revise and optimize its numerous business processes.

Answers

The answer : Business process management

A review of small business successes and failures indicates that the Multiple Choice businesses that are easiest to start offer the greatest potential for long-term growth and profits. restaurant industry offers the least risk for entrepreneurs. businesses with the potential for high profit levels tend to be difficult to start and hard to keep going. reason the service sector is rapidly growing is that these firms are easy to start and keep going, and offer high levels of security and growth potential.

Answers

Answer: businesses with the potential for high profit levels tend to be difficult to start and hard to keep going

Explanation:

A review of small business successes and failures indicates that the businesses with the potential for high profit levels tend to be difficult to start and hard to keep going.

The main reason for the above is that for firms that offer growth, these kind of forms are very challenging when one wants to begin them.

Even when one eventually starts them, they can be tough to keep going but it's worth it as they have huge potential for high profits.

Shondra is thinking of making payments for her laptop by setting up automatic withdrawals with the store. What must shondra consider before she decides to pay with automatic withdrawals?.

Answers

Answer:

If I was her I would consider what is below

Explanation:

She should consider at least:

1) How much each payment is AND the interest on each payment (if any)

2) How often the payments happens (monthly, bi-weekly, etc.)

3) Whether or not she will be able to afford each payment on time

4) If the benefit of having the laptop now, and probably paying a higher total price over time, out weighs the cost of just saving up for it and avoiding the interest

Following up point 4: If her getting the laptop immediately lets her make more money than what she will pay for it she should take out the loan and make the automatic payments. If this isn't the case and she doesn't need the laptop today she should just save up for it and not make any automatic payments

Answer:

C. Shondra should be sure she will have enough in her account to be able to make the monthly payments.

Explanation:

You should write down everything a speaker says when you take notes.
Please select the best answer from the choices provided
T
F

Answers

False- you should write key points not the whole thing

In the current labor market, suppose that the wage rate for accountants is significantly higher than the wage rate for economists. In the long run, if you observed that the wage rate for economists rose while the wage rate for accountants fell, which of the following would best explain your observation?
(A) The supply of economists must have increased, and the supply of accountants must have decreased.
(B) The supply of economists must have decreased, and the supply of accountants must have increased.
(C) The demand for economists must have increased, and the supply of accountants must have decreased.
(D) The demand for economists must have decreased, and the supply of accountants must have increased.

Answers

The best explanation for the rise in economist salaries and the fall in accounting salaries would be (B) The supply of economists must have decreased, and the supply of accountants must have increased.

Why is this the best explanation?

When there is a decrease in the supply of a commodity, its prices will go up. The salaries of economists went up because the number of economists available, decreased.

When there is an increase in the supply of something, the price will decrease. This is why the accountants saw their salaries decrease - the number of accountants available increased.

In conclusion, option B is correct.

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An official accounting statement that helps to explain the change in cash and cash equivalents is called the ____

Answers

Answer:

An official accounting statement that helps to explain the change in cash and cash equivalents is called the statement of cash flows.

Explanation:

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Karen James owes $10,000 in medical bills, $500 to the public utility, $300 on a car payment, $15,000 on a 5 year student loan, and $100,000 on a 15 year home mortgage. What is the total of Karen's current liabilities

Answers

Assuming he owes $10,000 in medical bills, the total of Karen's current liabilities is $10,800.

Current liabilities

Using this formula

Total current liabilities=Medical bills+Public utility+Car payment

Where:

Medical bills=$10,000

Public utility=$500

Car payment=$300

Let plug in the formula

Current liabilities=$10,000+$500+$300

Current liabilities=$10,800

Inconclusion the total of Karen's current liabilities is $10,800.

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Electrical engineers install electrical wiring. True or False?

Answers

Answer:

TRUE

Explanation:

Electricians install electrical systems and the wiring that connects them to a power source. While they ensure the electrical systems they install work properly they do not create those electrical systems; that's what electrical engineers do.

Answer:

Your answer would be (A) True

Explanation:

Firms and industries producing capital goods are affected most by the business cycle and the negative effects of a recession because purchases of capital goods ______.

Answers

Answer:

Decreases

Explanation:

As production increases, the fixed cost per unit Group of answer choices increases decreases remains the same either increases or decreases, depending on the variable costs

Answers

it should be noted that as production increases, the fixed cost per unit  decreases.

What is Production?

Production  can be regarded as the process of combining various material inputs and immaterial inputs in order to make something for consumption.

Hence, fixed cost per unit decreases with increase in production.

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How does starbucks make their product different than their competitor like Dunkin’ Dounts and mcdonald’s (examples of similar products) please answer

Answers

Answer: they make "COFFEE"

Explanation: "COFFEE"

Identify 3 duties you would expect a bookkeeper to perform​

Answers

Answer:

1.  Maintain accurate financial records

2. Pay suppliers, customers, and debts on time

3. Ensure the prompt collection of receivables

Karen's boss told the marketing department that a pull strategy should be implemented to sell the new line of footwear. Which communication strategy should the department use

Answers

Answer:

the amount of Karen's they put in question examples is amazing •>•

PLS I NEED THIS REALLLLLYYYY FAST !!!!!!!

Which of the following would make a person well suited for entrepreneurship?
a. prefers to follow others on projects

b. likes making decisions

c. doesn't like people

d. likes to work regular hours


APEX

Answers

Answer:

B bc I took that same test

Explanation:

A person who likes decision-making is well suited for entrepreneurship. The correct option is C.

Why decision-making skills is important to entrepreneurs?

Being able to make quick decisions that, more often than not, determine the future of your business is one of the most crucial characteristics of an entrepreneur. Entrepreneurs frequently have to make that crucial decision at the right time while in charge of their business because it will determine how it will develop in the future.

An individual's decision-making process consists of a number of steps they take to choose the best option or course of action for their needs. In the context of business, it refers to a series of actions taken by managers within an organization to decide the intended course for business initiatives and to initiate particular actions.

Thus, the ideal selection is option C.

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Which account is used to reduce assets for the amount of estimated bad debts?.

Answers

Answer:

Bad Debt And Doubtful Accounts

Explanation:

The account is used to reduce assets for the amount of estimated bad debts that is Bad Debt And Doubtful Accounts.

What is Asset?

An asset is considered a resource of the business which has an economic value in the future to the business which helps business activities to take place smoothly.

Bad debts are those that the business can't obtain and that have typically been identified explicitly. Liabilities with doubt are less likely to be paid back and are referred to as Doubtful Accounts.

The account, which is entered as the contra-asset account and appears as Allowance for Doubtful Accounts, is used to decrease assets to reflect the amount of projected bad debts.

Debit and credit entries for the provision for doubtful debts account to serve as the entry for this objective.

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Hawaiian food would be an example of what type of cuisine?
A
Classic cuisine
B
Regional cuisine
С
Nouvelle cuisine
D
National cuisine

Answers

Nouvelle cuisine



Hope it helps


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Nouvelle cuisine is the type of cuisine. As it is an example of Hawaiian food. Hence, option C is correct.

What is Nouvelle cuisine?

Nouvelle cuisine, which translates to "new cuisine," is a diverse international cooking style that first appeared in France in the 1960s and 1970s. It emphasized freshness, lightness, and clarity of flavour while also influencing new culinary trends across the globe.

Roger Verge, a pioneer of nouvelle cuisine, developed a Provençal cuisine he named "the meal of the sun" at his renowned restaurant Le Moulin de Mougins near Cannes, France. On Friday, Roger Verge passed away in his Mougins residence.

Nouvelle cuisine is still relevant today. Many chefs throughout the world are advocating the idea of using the freshest and locally produced ingredients, stressing plating as well, to obtain a good explosion of flavour in every dish.

Thus, option C is correct.

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The price of gas has increased and people are moving away from their old gas guzzlers to more fuel-efficient cars. This is an example of –

learning effect

complementary effect

income effect

substitution effect

Answers

Answer:

Substitution effect

Explanation: From the word substitute, the substitution effect could be inferred to mean the shift from a certain product or market to another usually due to increase in the price of the currently favored product to an alternative which seems less pricier and delivers almost the same level of quality. In most instances, economic imbalance often leads to consumers seeking for substitute products in other to balance up with their earning. When the price of a increases without simultaneousnincrease in economic growth which also translates into higher earning by consumers, then consumers will have to seek alternative products in other to maintain and balance spending.

If the price of a gas or an item increase then the people start to move towards those items that have less or least cost sech as in the case of the old fuel-efficient cars to fuel-efficient.

This is known as the substitution effect. The effect is one consumer price theory that is the effect of changes in the price of a good on the amount being demanded.  For an example the coffee and tea are demanded and of there is a rise in the rise of coffee then the consumers of hot drinks may decide to take in tea.

Hence the option D is correct.

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9. Each of the following is a business expense, except payment for *

advertising
monthly rent
utility bills
equipment

Answers

Answer:

equipment

Explanation:

Equipment refers to tools or machinery used in the production of other goods and services for sale. They are not consumables, nor are they meant for sale. Equipment is treated as assets of the business.

Payments for assets is not an expense.  Since the equipment will be used in many financial periods, its cost cannot be assigned to the purchase year alone. Payment for the equipment is treated as a capital or asset acquisition.

Mollie is purchasing a car and needs to finance $24,000 from the bank with an annual percentage rate (apr) of 4.8%. she is financing it over 5 years and making monthly payments. what is the monthly payment?

Answers

According to the purchasing a car, the monthly payment, PMT is equal to $450.71.

What is the term monthly payment about?

A monthly payment refers to as a payment that include a money pay by the holder to his lender each month with interest amount.

Solution:

Given Information:

i) Value of Loan, or Present value, PV = 24000

ii) Annual percentage rate , APR = 0.048

iii) number of periods, n = 12

Thus,

Periodic interest, R = APR / n  = 0.048 / 12 = 0.004

Number of years, t = 5

Monthly Payment, PMT = PV*R/1-(1+R)(-1*n*t)=24,000*0.004/1-(1+0.004)-60  = $450.71

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In the one-period valuation model, a stock's value falls if the ________ rises. A. required return on equity B. dividend C. current price D. expected future price

Answers

In the one-period valuation model, a stock's value falls if the required return on equity rises.

How does the required return on equity affect stock's value?

The required return on equity is the return that stockholders demand for holding the stock of a particular company. The required return on equity is an indicator of the level of risk of a particular stock.

If the required return on equity rises, it means that the stock has an increased level of risk. Most stockholders would not want to hold this stock. This would lead to a fall in the price of the stock.

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An urban center that is disproportionately larger than the second largest city in a country and that dominates the country’s social, political, and economic activities can be best classified as.

Answers

A primate city is an urban center that is disproportionately larger than the second largest city in a country and that dominates a country's social, political and economic activities.

How are primate cities developed?

Some factors that contribute to the development of a city in relation to others are related to:

UrbanizationEconomic opportunitiesPolitical centralizationIndustrialization

Therefore, some primate cities, such as Paris and Bangkok, are cities that show great social and economic development, in addition to being target cities for internal migration.

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