Samantha's Bath and Body Shop did not reach the break-even point for the year, which means answer is d. $37,500.
How to find?The break-even point is the level of output at which the cost of production equals the revenue gained from selling the goods or services produced. In this situation, Samantha's Bath and Body Shop's break-even sales volume can be determined by the given information:
Variable Costs = $27,000
Fixed Costs = $18,000
Net loss = $4,500
The break-even point can be calculated using the following formula:
Break-Even Point = Fixed Costs / (Price - Variable Costs)
Where:
Fixed Costs = $18,000Price = Sales Price per unit
Variable Costs = $27,000 / Number of units sold
Let's solve for the break-even point using the formula above:
BEP = $18,000 / (P - $27,000 / Q)Since we're looking for the total sales volume, we can multiply the equation by Q:
BEP x Q = $18,000Q / (P - $27,000 / Q)
Q(BEP) = $18,000Q / (PQ - $27,000)
Q(BEP) = $18,000 / (P - $27,000 / Q), We know that the net loss is equal to $4,500.
Therefore, the formula can be modified as follows:
Revenue - Costs = Net Loss
Q (P - $27,000 / Q) - $18,000 = $4,500Q
P - $27,000 - $18,000/Q = $4,500.
Since we're looking for the break-even sales volume: BEP = Q = ($31,500 ± sqrt ($31,500^2 - 4($36,000)($27,000))) / 2($36,000)
BEP = Q = ($31,500 ± sqrt(993,225,000 - 3,888,000,000)) / 72,000
BEP = Q = ($31,500 ± sqrt(-2,894,775,000)) / 72,000.
Since we cannot take the square root of a negative number, there is no break-even point. Therefore, Samantha's Bath and Body Shop did not reach the break-even point for the year. Answer: D. $37,500.
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If the High Rate Method makes the most mathematical sense, why would anyone use the Snowball Method instead?
It saves more money in interest
It increases the number of debts you have to repay
It increases the number of monthly payments you need to make
Paying off any debt in full feels good and motivates you to keep going
Paying off any debt in full feels good and motivates you to keep making the most mathematical sense, would be used by the Snowball Method instead. Thus, option D is correct.
What is mathematical?
Mathematical subjects encompass things and their changes, forms and the locations in which they exist housed formulae and supporting structures, and numerals.
The Snowball Method would just be employed in its place since repaying off any debt completely feels wonderful and encourages you to continue. When a debt becomes paid in full, you transfer the funds you were using to make that payment to the subsequent, lowest loan. In a perfect world, this procedure would go on until all obligations were settled.
Therefore, option A is the correct option.
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PART A: Locate the following landmarks on a coordinate plane. (If you are creating your own, Use graph poper, and draw the origin in the middle. The grid should extend 20 units in all. directions.) Each unit on your paper will represent 0.1 of a mile. As you add features to your city throughout the gctivity, be sure to mark and label each one on your grid. Some fondmarks are estoblished in your city and would be very difficult to relocate. Locate and place these landmarks on your grid with a dot and label: Courthouse (−2,11) Electric Company (−7,−4) School (0,7) Historic Mansion (−14,4) A river runs through your city following the equation y=2x−5, The main highway runs through your city following the equation 4x+3y=12 The only other paved rood (It Street) currently runs from the courthouse to the electric company.
Note: During this activity. you may draw roads sunning through landmarks. Because your map has a smal scale: roods and fondmarks may appear to overlop when they are separated by several feet in distance in reality, Your city would like to attract tourists, so you will need a tourist center at the point where the moin highway and 1st Street intersect. Where will the tourist center be located?
The tourist center will be located at the point where the main highway and 1st Street intersect on the coordinate plane. The exact coordinates of this intersection can be determined by solving the system of equations formed by the equations of the main highway and 1st Street.
To find the intersection point, we substitute the equation of 1st Street (y = 2x - 5) into the equation of the main highway (4x + 3y = 12) and solve for x. Once we find the value of x, we can substitute it back into the equation of 1st Street to determine the corresponding y-coordinate.
After calculating the values, we find that the tourist center will be located at approximately (-1.4, -3.8) on the coordinate plane.
This means that the tourist center should be placed at the point (-1.4, -3.8) on the grid, which represents the intersection of the main highway and 1st Street in the city. This location would provide convenient access for tourists coming from both the main highway and 1st Street.
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Refer to exhibit 4-5. if a free market were allowed in the transplanted kidney market, then the equilibrium price would be p2. the number of kidneys transplanted would increase by _________ compared to the number transplanted at a price ceiling of p= $0. (q3 - q2) q2 (q2 - q1) (q3 - q1)
Answer:
(q2 - q1)
Explanation:
I have uploaded the picture the question refers to below.
We can see that under a price ceiling of $0, the quantity of kidneys supplied is Q1, and if the price ceiling is removed, and the market is allowed to reach equilibrium, the new quantity of kidneys supplied is Q2, so the increase in the supply of transplanted kidneys can be found by the formula (q2 - q1)
Determine whether you have enough monies to live comfortably each year for 20 years in your dream state of Oregon.
Assume you are at age 65 and have the following assets:
Pension Plan worth $375,000. You plan to take an ordinary annuity on your pension to withdraw all assets in 20 years. Assume 4. 5% interest per year. You will get monthly payments for 20 years.
Social Security - $27,600 per year for 20 years. Assume that this is the amount you will receive each year.
Savings worth $140,000. You plan to take an ordinary annuity to withdraw all assets in 20 years. Assume 4. 25% interest per year. You will get monthly payments for 20 years.
Answer the following questions:
What will be the monthly amount received individually from the pension plan, social security, and savings? What will be the monthly total? Round all 4 answers to the nearest penny.
What will be the yearly amount received individually from the pension plan, social security, and savings? What will be the yearly total? Round all 4 answers to the nearest dollar.
What will be the 20-year amounts received individually from the pension plan, social security, and savings? What will be the 20-year total amount? Round all 4 answers to the nearest dollar.
Is the total amount enough to retire comfortably in your dream state of Oregon? What are your plans to make the required savings now and/or in the future to live comfortably in your dream state? Explain
The given information is insufficient to provide specific calculations for the monthly, yearly, and 20-year amounts received individually from the pension plan, social security, and savings. However, with the provided information about the assets and their respective interest rates, it is possible to make some general observations. To determine the exact amounts, the formulas for calculating annuity payments would need to be applied.
In terms of retirement planning, it is important to consider various factors to assess whether the total amount received is enough to live comfortably in Oregon for 20 years. Factors such as living expenses, inflation, healthcare costs, and personal preferences need to be taken into account. It is recommended to create a detailed retirement budget that includes all expected expenses and compare it to the projected income from the pension plan, social security, and savings. This will help determine if the income is sufficient to cover living expenses and maintain a comfortable lifestyle.
If the total amount falls short of the desired retirement income, additional savings and investments may be necessary. Individuals can consider options such as contributing to retirement accounts (e.g., 401(k), IRA), investing in stocks or bonds, or exploring other income-generating opportunities. Working with a financial advisor can provide valuable guidance in developing a comprehensive retirement plan and making the necessary savings and investment decisions.
Ultimately, the ability to retire comfortably in Oregon depends on personal financial goals, lifestyle choices, and the level of financial security one desires. It is crucial to regularly review and adjust the retirement plan as circumstances change to ensure a comfortable and secure retirement.
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What can a boosted post help an advertiser achieve?
A boosted post helps an adviser to connect with the audience and gain trust.
Boosted post is a kind of post that is used on social media platforms in order to enhance the page of the platform and to attract audience to the page. Boosted post can help better communication with the audience along with the increase in a greater number of messages, calls and texts. Boosted posts help for better advertisements of the product. For example, A Chocolate brand may use Boosted posts to gain audience as well as consumers. Boosted posts helps an adviser to be discovered among people, to establish a benchmark in the market and to gain more and more customers. It's a kind of marketing strategy used for publicity purpose.
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Which of the following is a leading business cycle indicator? a. the unemployment rate b. the volume of outstanding commercial loans c. new building permits d. d. personal income
New building permits is a leading business cycle indicator. Option C is the correct answer.
Leading indicators track economic growth, where changes may signal the start of a new business cycle. Average weekly manufacturing labor hours, factory orders for items, building permits, and stock prices are all factors that make up the index of leading indicators. A shift in the business cycle may be indicated by changes in these measures. Option C is the correct answer.
Business cycle indicators (BCI) are composite indices of leading, lagging, and coincident data used to examine and forecast trends and economic turning points. BCI is created and tracked by a number of governmental and commercial entities that gather and analyze economic data and statistics. To really comprehend the true nature of economic activity, BCI must be utilized in combination with other economic indicators.
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Which is a characteristic of the takeoff stage of Rostow's Five Stages of Economic
Growth?
The labor of a country is unskilled and focuses on agricultural production, animal husbandry, and the harvesting of timber.
Advancements in technology require a skilled labor force competent in electronics, medicine, and engineering.
The population as a whole has its basic needs met and enjoys a high
standard of living focused on consumer goods.
A country begins to grow rapidly and new industries start to emerge that
drive further economic development.
The characteristic of the takeoff stage of Rostow's Five Stages of Economic Growth is: A country begins to grow rapidly, and new industries start to emerge that drive further economic development.
What is Economic Growth?The economy expands significantly during the takeoff phase as it shifts from traditional industries to more contemporary and industrial sectors. New industries frequently grow as a result of greater investment and technical development.
This expansion supports subsequent economic growth and creates the conditions for long-term advancement. Rapid industrialisation and economic structural change are occurring at this time.
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What is also known as the "world's largest pharmacy" -- a place where indigenous groups are using drones to keep tabs on illegal activity?
Answer: Amazon Rainforest
Explanation:
The Amazon Rainforest of South America is the largest rainforest in the world and is usually called Earth's lungs due to the large amount of oxygen it releases and the large amount of carbon dioxide it removes from the atmosphere and stores.
The Amazon has another name though which is the Worlds Largest Pharmacy. This is because the abundance of flora in the Amazon provide so many herbs that can be used as natural medicine.
Indigenous groups use drones in the Amazon to track places where people are engaging in illegal logging in efforts to protect the forest.
The marginal benefit of a slice of pizza is the: 1. total amount that a consumer is willing to pay for a whole pizza, divided by the number of slices
2.difference between the value of the slice to the consumer and the price of the slice.
3.maximum amount that a consumer is willing to pay for the slice.
4.price of the slice of pizza
The marginal benefit of a slice of pizza is the difference between the value of the slice to the consumer and the price of the slice.
Marginal benefit refers to the additional benefit or satisfaction that a person or entity receives from consuming or producing one more unit of a good or service. It is the extra benefit gained from the consumption or production of one additional unit. Marginal benefit can vary depending on the individual and the context. For example, the marginal benefit of a second cup of coffee may be high for someone who needs a caffeine boost, but low for someone who is already alert. In economics, understanding marginal benefit is important for making decisions about resource allocation, as it helps determine the optimal level of consumption or production. By comparing the marginal benefit to the marginal cost of producing or consuming an additional unit, individuals and firms can make more informed decisions about resource allocation and maximize their utility or profit.
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Write any five methods of getting information of foreign employment and discuss any one of them.
Answer:
May it will help you
Explanation:
1) Notice board
2) Book of introduction
3) Institutions work working under the ministry of labour
4) Authority of human resources
5) Manifestos of training institutions
6)Web site
7) Newspapers
8) Public meeting :the manpower company, training institutions and institutions of public counseling are working in the field of foreign employment in nepal.
They come to the direct or indirect contact of people through various programmes of interaction, seminar, and meeting.
9)Radio and television
Foreign employment getting information through Notice board, Book of introduction, Authority of human resources, Web site, and Newspapers.
Who is Foreign employment?
Public meeting: When the manpower company, training institutions, and institutions of public counseling are working in the field of foreign employment in Nepal.
Although, They come to direct or indirect contact with people through various programs of interaction, seminars, and meetings.
Also, Foreign employment getting information through Institutions work working under the ministry of labor, Manifestos of training institutions, Radio, and television
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In business writing, the main idea of a written work should be located
a. At the end of the first paragraph
b. In the body of the document
At the beginning of the first paragraph
d. In the salutation of the document
C.
Please select the best answer from the choices provided
Ο Α
B
С
OD
Answer:
c
Explanation:
cccccccccccccccccccccccccc
Answer:
well i blive its c
Explanation:
define ecommerce in business with example
Answer:
See below
Explanation:
eCommerce refers to business transactions conducted via internment. eCommerce is the short form of electronic commerce. It is the selling and buying of products and services through the internet platform. eCommerce includes other commercial transactions conducted online such as online/internet banking, online money transfers, online auctions, ticketing, and payments.
An example of eCommerce is the online retail stores where shoppers pick and select merchandise on the retail store's website and pay online. The retail store then organizes for the items to be delivered to the customer's premises.
Something is considered a business primarily based on:
Something is considered a business primarily based on:
The functions the organization performs
The size of the office and/or staff
Having a hierarchical leadership structure
The amount of profit it generates
Question at position 2
2
1 point
Question at position 2
A business is a registered company that exchanges goods or services for money
A business is a registered company that exchanges goods or services for money
True
False
Question at position 3
3
1 point
Question at position 3
The finance team is not responsible for the overall strategy and direction of the company money.
The finance team is not responsible for the overall strategy and direction of the company money.
True
False
Question at position 4
4
1 point
Question at position 4
You’ve just found out that your business has gone hugely over budge, spending the annual budget already even though it’s only October. Which team member(s) would you need to call in to your office for a serious conversation about whether or not the established annual budget already even though it’s only October. Which team member(s) would you need to call in to your office for a serious conversation about whether or not the established annual budget was appropriate?
You’ve just found out that your business has gone hugely over budge, spending the annual budget already even though it’s only October. Which team member(s) would you need to call in to your office for a serious conversation about whether or not the established annual budget already even though it’s only October. Which team member(s) would you need to call in to your office for a serious conversation about whether or not the established annual budget was appropriate?
Marketing
Finance
Accounting
Sales
Question at position 5
5
1 point
Question at position 5
There’s a major expo event coming up where your competitors will be buying booths to show off their products. Your ____ department proposes that one of their members goes to the expo and works at the booth; the exact costs for travel, renting booth space, etc., will be reported to ____.
There’s a major expo event coming up where your competitors will be buying booths to show off their products. Your ____ department proposes that one of their members goes to the expo and works at the booth; the exact costs for travel, renting booth space, etc., will be reported to ____.
marketing; accounting
human resources; finances
management; human resources
finance; accounting
When two or more parties exchange products and services without using cash, this is known as bartering. Thus, the option is false.
What are the features of barter system?A barter is a transaction in which two or more parties exchange products or services without exchanging cash or other forms of payment like credit cards.
A straightforward idea underlies bartering: Two parties bargain to assess the relative worth of their goods and services, then offer them to one another in an equal trade. It predates the creation of actual hard cash and is the world's oldest form of trade.
Because they lack the funds or credit to purchase those items, businesses may desire to trade their goods for other goods. In its simplest form, bartering entails the exchange of one party's good or service for another party's good or service.
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the exponential form of 6×6×6×6 is 6 the base is 4 True or False?
what do i say to "tell me about yourself" in a job interview
(20 pts)
Answer:
1- Mention past experiences and proven successes as they relate to the position. ...
2- Consider how your current job relates to the job you're applying for. ...
3- Focus on strengths and abilities that you can support with examples. ...
4- Highlight your personality to break the ice.
Explanation:
You choose to complete your homework rather than watch television so that you can earn a good grade. You made the choice with the lowest ______.
A. Opportunity cost
B. Demand
C. Scarcity
D. Benefit
Answer:
A. Opportunity cost
Explanation:
In Economics, Opportunity cost also known as the alternative forgone, can be defined as the value, profit or benefits given up by an individual or organization in order to choose or acquire something deemed significant at the time.
Simply stated, it is the cost of not enjoying the benefits, profits or value associated with the alternative forgone or best alternative choice available.
Hence, the opportunity cost of a choice is the benefits that could be derived in from another choice using the same amount of resources.
For instance, if you decide to invest resources such as money in a food business (restaurant), your opportunity cost would be the profits you could have earned if you had invest the same amount of resources in a salon business or any other business as the case may be.
In this scenario, you choose to complete your homework rather than watch television so that you can earn a good grade. Therefore, you made the choice with the lowest opportunity cost.
Answer:
Opportunity cost
Explanation:
if the price of pizza increases, then what will happen to demand for pizza, if all other things remain unchanged?
If the price of pizza increases and all other things remain unchanged, the demand for pizza will decrease.
According to the law of demand, when the price of a good or service increases, the quantity demanded of that good or service tends to decrease, assuming other factors remain constant. In the case of pizza, if the price increases, consumers may find it less affordable or less attractive compared to other food options.
As a result, they may choose to reduce their quantity demanded or switch to alternative food choices. This inverse relationship between price and quantity demanded is a fundamental principle in economics and reflects consumers' sensitivity to changes in price.
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Use Figure 20-2. A society that has passed the turning point shown in the figure would probably NOT see an increase ina. well-being.b. education level.c. rate of population growth.d. life span.e. health care access.
Figure 20-2 shows a c)population growth curve that starts with a slow growth rate, accelerates, reaches a peak, and then slows down again.
The point at which the growth rate starts to slow down is called the turning point. If a society has passed the turning point, it means that the population growth rate is slowing down, which would likely have a positive impact on the well-being of the population. However, it may also mean that there is a decrease in the education level and rate of population growth. This is because with a declining population growth rate, there may be less demand for education and less pressure to have more children. Nevertheless, it is likely that there would be an increase in life span and health care access, as these factors are often correlated with a higher standard of living, which is associated with a lower population growth rate. In conclusion, a society that has passed the turning point shown in Figure 20-2 would probably see an increase in well-being, life span, and health care access, but may not see an increase in education level and rate of population growth.
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AWARDING BRAINLYIST TO CORRECT ANSWER!!!!!!!!!!!!!!!!!!!!!!!!!!!
Joshua wants to be a lawyer. He found the following table on the Bureau of Labor Statistics’ website to find out about the employment projections 2022. Review the table. Then, answer the question below.
What conclusion can Joshua draw from this table?
A.
There are very few lawyers in the country.
B.
He could make more money working in marketing instead.
C.
There is an increasing need for lawyers, so it is a good career option.
D.
He will probably have a lot of student loans after he graduates.
E.
Lawyers are needed to work for the government and private firms.
Answer:
Explanation:
A) wrong. You call 3/4 of a million not very many? Let's see what the other answers are.
B) We don't know anything about marketing from this table. Let's move on. This is likely not the best choice.
C) There is an increased need? We don't know that. What would we compare it to? An increase in population might account for the 10% increase in lawyers. I would say it's likely not C.
D) We don't know this either. Maybe, but he might anyway.
E) We don't know this either. They might be self employed.
So no answer appears obvious. We have to make a choice from answers we don't like.
Since all the others don't seem feasible, I guess C is the best answer, but don't be surprised if it is something like A
Answer:
The correct answer is C
Explanation:
i know this because I got it right
In 2020, Ada lived with her son, Robert, and his wife, Barbara. Ada’s only source of income was a $1,500 fully taxable pension, which she spent on clothes and recreation. Robert and Barbara paid Ada’s medical and drug expenses of $600 for the year. Robert and Barbara’s total food expense for the household was $6,000. The fair rental value of the lodging provided Ada was $1,200 for the year, based on the cost of similar room facilities. What was Ada’s total support for the year for purposes of determining whether Robert and Barbara can claim Ada as a dependent?
Answer:
$5,300
Explanation:
Calculation to determine Ada’s total support for the year
Medical and drug expenses $600
Add Lodging $1,200
Add household total food expense $2,000
($6,000/3 Ada+Robert+Barbara)
Add Source of income $1,500
Total support $5,300
($600+$1,200+$2,000+$1,500)
Therefore what Ada’s total support for the year for purposes of determining whether Robert and Barbara can claim Ada as a dependent will be is $5,300
What impact did private investment have on Japan's industrialization?
Private investment played a crucial role in Japan's industrialization process. Following the Meiji Restoration in 1868, the Japanese government encouraged private investment by offering incentives.
Private investors used these incentives to build factories, develop infrastructure, and introduce new technologies, which helped to create a diversified and modernized economy.
Private investment was particularly important in the development of Japan's heavy industries, such as steel, shipbuilding, and machinery. The government supported these industries by providing infrastructure and favorable policies, but it was private investors who provided the capital and technical expertise needed to establish and expand these industries.
Overall, private investment was essential to Japan's rapid industrialization, allowing the country to catch up with and even surpass the industrialized nations of the West in a relatively short period.
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in which business structure is the firm a hierarchically organized around a set of functions where each function has a core competency that it concentrates upon?
In functional business structure is the firm a hierarchically organized around a set of functions where each function has a core competency that it concentrates upon
A functional structure is the term used to describe the organisational structure of a firm. The organisation is split up into many departments or functions, such as marketing, finance, operations, etc., in this structure. Each function is headed by a functional manager, who is in charge of the initiatives and jobs that fall within their purview.
To guarantee that the overall objectives of the organisation are realised, the various functions are often hierarchical and interact with one another. Organizations with a distinct labour division and clearly defined areas of specialisation are best suited for the functional structure.
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What are the 4 main investment types?.
There are 4 essential funding types or asset instructions that traders can pick from: shares, property, cash, and stuck hobby.
The required details for fixed interest rate in given paragraph
A constant hobby price is an unchanging price charged on a liability, together with a mortgage or loan. It would possibly practice all through the whole time period of the mortgage or for simply a part of the time period, however it stays the equal all through a hard and fast period. Mortgages may have a couple of hobby-price options, such as one which combines a hard and fast price for a few part of the time period and an adjustable price for the balance. These are mentioned as “hybrids.” A constant hobby price is appealing to debtors who don’t need theirhobby quotesfluctuating over the time period in their loans, probably growing their hobby prices and, through extension, theirloan payments. This kind of price avoids the threat that incorporates a floating or variable hobby price, wherein the price payable on a debt responsibility can range relying on a benchmark hobby price or index, now and again unexpectedly.
A constant hobby price avoids the threat that a loan or mortgage charge can substantially boom over time. Fixed hobby quotes may be better than variable quotes.
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Which of the following increases liabilities but not assets? a. Taking out a loan to buy a new car b. Taking out a loan to go on vacation c. Using a credit card to buy a computer d. Paying off a student loan Please select the best answer from the choices provided A B C D
Answer:
Taking out a loan to go on vacation
Explanation:
Liabilities are money owed to other people. They include debts, loans, or other obligations that a person or business is expected to pay. Taking up loans increases liabilities. A loan to expand a business either by increasing inventory or equipment add to both assets liabilities.
A vacation is not an asset. A loan to finance a vacation will only add to liabilities. Paying off a student loan reduces liabilities. Any debt to purchase a car or a computer increases assets and liabilities since the two are assets.
Answer:
taking out a loan on vacation
Explanation:
Write H if the resource is a human resource, and NH if it is a nonhuman resource. 1.Machines
2.Tools
3.Workers
4.Land
5.Water
6.Capital
7.Labor force
8.Time
9.Entrepreneur
10.Process
1.H
2.H
3.NH
4.NH
5.H
6.NH
7.H
8.NH
9.H
10.H
organizations that have a mix of standard products and projects are good candidates for which type of project management structure? multiple choice question. functional matrix dedicated project
organizations that have a mix of standard products and projects are good candidates for MATRIX type of project management structure
A matrix organization is a type of workplace where teams have several leaders reporting to them. In a matrix organization, team members (whether internal or remote) report to both their department head and a project manager. Without realigning teams, this management structure might assist your business in developing new goods and services.
In contrast, team members in a matrix organization also report to project managers. It is appropriate to choose a separate manager for each project because tasks associated with them frequently require assistance from employees from different areas, such as IT, marketing, and finance.
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There is an upside to linking the s&op process with supply chain partners. For one thing, __________ can help firms do a better job of improving overall supply chain performance, particularly in the area of cost.
There is an upside to linking the s&op process with supply chain partners. For one thing by coordinating plans across the supply chain, companies can improve overall supply chain performance.
Do you understand what the supply chain is?
The supply chain includes all activities that lead to the delivery of products and services to end users. It starts with the selection of raw materials for production, the determination of raw material suppliers, the manufacturing process, the packaging of the product, the selection of distribution challenges, and finally the delivery of the product to the end user.Everything from inception to delivery. All people, organizations, processes, activities, and resources that serve the stage become part of the organization's supply chain.
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What should be included in a protocol for new product development? (Select all that apply)what the product will be and doa well-defined target marketspecific customer needs, wants, and preferences
All of the options should be included in a protocol for new product development.
A well-defined protocol is crucial for the success of a new product. The protocol should outline what the product will be and do, including any technical specifications or unique features. A well-defined target market should also be identified in the protocol, as well as specific customer needs, wants, and preferences that the product will fulfill. Having a clear understanding of the target market and customer needs will help guide the product development process and ensure that the final product is appealing and relevant to its intended audience.
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Suppose you want to buy a house that costs $425,000. You have $85,000 dollars for a down payment. The bank is offering two different mortgage options. - Option A: 20-year mortgage at 4.0\%. - Option B: 20-year mortgage at 3.5% with two points. The cost of the points will be rolled into the mortgage. Compute the monthly payments for mortgage option A. (round to the nearest cent) Compute the total cost of the home using mortgage option A. (round to the nearest dollar) Compute the monthly payments for mortgage option B. (round to the nearest cent) Compute the total cost of the home using mortgage option B. (round to the nearest dollar) Assuming all other factors are the same, which mortgage option should you choose? Option A Option B There is no difference between the options There is not enough information to say
The cost of the house = $425,000 ,Down payment = $85,000 ,Mortgage Options:Option A: 20-year mortgage at 4.0%.Option B: 20-year mortgage at 3.5% with two points.Calculation of Mortgage option A:To calculate the monthly payment, we can use the formula;
PMT = (PV × r) / [1 − (1 + r)−n]
Here, PV = Present value or loan amount
= $340,000 (425,000 − 85,000)
R = Rate of interest per month
= 4 / 12%
= 0.33%
N = Number of monthly payments
= 20 × 12
= 240
Now substitute the values in the formula and calculate the monthly payment:
PMT = (340000 × 0.33%) / [1 − (1 + 0.33%)−240]
≈ $2,099.03Therefore, the monthly payment for mortgage option A is $2,099.03.
Calculation of total cost of the home using mortgage option A:The total cost of the home is the sum of down payment and total payments over the life of the loan. The total payments can be calculated by multiplying the monthly payment by the total number of payments.
n = 20 × 12 = 240 (total number of payments)
Total Payments = PMT × n
= 2,099.03 × 240
≈ $503,765.20
Therefore, the total cost of the home using mortgage option A is $503,765.20.
Calculation of Mortgage option B:For mortgage option B, the rate of interest is 3.5% and 2 points.
Point is an upfront payment made to reduce the interest rate. Each point equals 1% of the loan amount. In this case, 2 points cost 2% of the loan amount.
Let P be the cost of 2 points in dollars.P = 2% × 340000= $6,800
Total loan amount = $340,000 + $6,800 = $346,800
Now, the rate of interest for mortgage option B = 3.5%Monthly rate of interest = 3.5 / 12 = 0.292%
Now use the same formula as in option A and calculate the monthly payment:
PMT = (346800 × 0.292%) / [1 − (1 + 0.292%)−240]
≈ $1,951.61
Therefore, the monthly payment for mortgage option B is $1,951.61.
Calculation of total cost of the home using mortgage option B:The total payments can be calculated by multiplying the monthly payment by the total number of payments.
n = 20 × 12 = 240 (total number of payments)Total Payments
= PMT × n
= 1,951.61 × 240
= $468,387.92
Now add the down payment to the total payments to get the total cost of the home.
Total Cost of Home = Down Payment + Total Payments
= $85,000 + $468,387.92
= $553,387.92
Therefore, the total cost of the home using mortgage option B is $553,387.92.Comparing the two options:
Total Cost of the Home using Mortgage Option A = $503,765.20
Total Cost of the Home using Mortgage Option B = $553,387.92
Option A: 20-year mortgage at 4.0% with monthly payment of $2,099.03
Option B: 20-year mortgage at 3.5% with 2 points with monthly payment of $1,951.61
Based on the above calculations, it is clear that option B is the better choice. Therefore, the correct option is Option B.
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Use the following chart to explain how the amount of principal affects the total cost of the loan
Answer: The higher the principal, the higher the total cost of the loan
Explanation:
From the chart shown we can see that the loan with a higher principal has a higher total cost than the loan with the smaller principal.
This happens because the interest rate attached affects larger figures more than smaller ones. 6.47% of $6,000 is $389 which is larger than 6.47% of $5,000 which is $324 (calculating the cost of a loan is more cumbersome than this but this shows the effect as well).
When compounded overtime, this difference will be even more and thus shows that larger principals cause larger total costs.
Answer:
The higher the principal, the higher the total cost of the loanExplanation: In a part of the mortgage payment is dedicated to repayment of the principal balance.
Now explain that Loans are structured so the amount of principal returned to the borrower starts low and increases with each mortgage payment.Then, The payments in the first years are applied more to interest than principal, while the payments are in the final years.In our mortgage $100,000, The principal is $100,000.
This happens because the interest rate attached affects larger First figures will more than smaller ones.6.47% of $6,000 is $389 which is larger than = 6.47% of $5,000 which is $324 .
now,(calculating the cost of a loan is more this shows the effect as well).
When compounded over time, this is difference will be even more and thus shows that larger principals cause larger total costs.Learn more about :
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