Question
In: Finance
You are offered a line of credit that requires a minimal 3% repayment of principal each...
You are offered a line of credit that requires a minimal 3% repayment of principal each month at an interest rate of 3,6%, compounded monthly. If you draw down $15,000 on the line, what will be the second month's payment?
a. $480
b.$460
c.$470
d. $450
Solutions
Expert Solution
Balance principal after 1st payment = Principal x (1- 0.03)
= $ 15,000 x 0.97
= $ 14,550
For 2nd payment,
Interest amount = Balance principal x 0.036/12
= $ 14,550 x 0.003
= $ 43.65
Principal portion = Balance principal x 0.03
= $ 14,550 x 0.03
= $ 436.50
Total payment = Interest amount + Principal portion
= $ 43.65 + $ 436.50 = $ 480.15 or $ 480
Second month’s payment will be $ 480
Hence option “a. $ 480” is correct answer.
jeff jeffy answered 1 year agoRelated Solutions
7. What recommendations would you make in regards to properly managing credit card usage and repayment?...
7. What recommendations would you make in regards to properly
managing credit card usage and repayment? Your response should be
at least 100 words.
7. What recommendations would you make in regards to properly managing credit card usage and repayment?...
7. What recommendations would you make in regards to properly
managing credit card usage and repayment? Your response should be
at least 100 words.
You are offered a deal for purchasing a vehicle that requires you to pay $200 per...
You are offered a deal for purchasing a vehicle that requires
you to pay $200 per month for the first year and payments of $400
per month during the second year. The APR is 18% and payments begin
in one month. What is the present value of this 2-year loan?
Place the letter of each type of health insurance option offered on the line next to...
Place the letter of each type of health insurance option offered
on the line next to the statement describing it.
a. Traditional
b. HMO
c. PPO
d. HSA
e. MSA
1. I don’t like the new insurance plan because I can only go to
doctors and hospitals that are approved by the plan. I have to stop
seeing my doctor and start with a new one that I’m assigned to.
2. I have expensive health problems, and my insurance plan...
3–3. Consumer Rights. Best Buy, a national electronics retailer, offered a credit card that allowed users...
3–3. Consumer Rights. Best Buy, a national electronics retailer,
offered a credit card that allowed users to earn “reward points”
that could be redeemed for discounts on Best Buy goods. After
reading a newspaper advertisement for the card, Gary Davis applied
for, and was given, a credit card. As part of the application
process, he visited a Web page containing Frequently Asked
Questions as well as terms and conditions for the card. He clicked
on a button affirming that he...
A revolving line of credit allows you to use credit and pay it back at your...
A revolving line of credit allows you to use credit and pay it
back at your own pac as long as you pay a minimum amount each
monthpaying interest on the unpaid balance.
True False
Suppose you have the option to extend a loan to a friend this year for $1000 in exchange for repayment next year of $1100 (the $1100 is the principal plus interest).
Suppose you have the option to extend a loan to a friend this
year for $1000 in exchange for repayment next year of $1100 (the
$1100 is the principal plus interest). Every year, however, the
friend has the option to borrow $1000 again in exchange for $1100
repayment one year later, i.e. the friend can roll over the debt.
You know this friend well and know that he will always roll over
the debt and will never default.a. Assume neither...
3.a) What is the price of each of the following bonds ($1,000 principal) if the current...
3.a) What is the price of each of the following bonds ($1,000
principal) if the current interest rate is 8 percent? (4 points)
Firm A: coupon 4.5%, Maturity 5 years Firm B: coupon 4.5%, Maturity
10 years Firm C: coupon 12%, Maturity 5 years Firm D: coupon 12%,
Maturity 10 years Firm E: coupon 0%, Maturity 5 years Firm F:
coupon 0%, Maturity 10 years b) What is the duration of each bond?
(8 points) c) Rank the bonds in...
3.a) What is the price of each of the following bonds ($1,000 principal) if the current...
3.a) What is the price of each of the following bonds ($1,000
principal) if the current interest rate is 8 percent? (4
points)
Firm A: coupon 4.5%, Maturity 5 years
Firm B: coupon 4.5%, Maturity 10 years
Firm C: coupon 12%, Maturity 5 years
Firm D: coupon 12%, Maturity 10 years
Firm E: coupon 0%, Maturity 5 years
Firm F: coupon 0%, Maturity 10 years
b) What is the duration of each bond? (8
points)
c) Rank the bonds in...
3. The Targeted Jobs Tax Credit existed from 1979 through 1994 and offered employers a tax...
3. The Targeted Jobs Tax Credit existed from 1979 through 1994
and offered employers a tax credit for each less-skilled worker
they employed. Assume that the tax credit was fixed at $3 per hour
worked by a less-skilled worker.
How would this tax credit have affected the demand curve for
less-skilled workers? What are the predicted effects on wages and
employment? Use a graph to illustrate your answer.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Given an array of positive integers a, your task is to calculate the sum of every...
- Define “culture.” Software is defined by the Merriam-Webster Dictionary as "the programs that run on a...
- In humans, hypotrichosis (sparse body hair) is a rare autosomal recessive condition. Let h = hypotrichosis...
- Increase all of the listing prices by 5% for all listings under $500,000 and 10% for...
- Samsung Industry that requires you to act as a change agent to form an organizational change...
- Use fork() Create a program that reads characters from an input file. Use fork to create...
- A pension fund manager is considering three mutual funds. The first is a stock fund, the...
ADVERTISEMENT