4. If you were opening a savings account with compound interest, would you prefer an account that offers annual compounding, quarterly compounding, or daily compounding? Why? (3-6 sentences. 2.0 points) The more often it is compounded the better.
What is a credit score? (0.5 points) A number assigned to a person that indicates to lenders their capacity to repay a loan. 3. What is installment credit? (0.5 points) Traditional consumer loans, originated and serviced locally, and repaid over time by regular payments of principal and interest.
* The interest rates are set by the ECB (European central bank) for the whole Eurozone. This will help keep inflation low. * The euro has brought inflation down to a low and stable level. In the 1970s and ‘80s many EU countries had very high inflation rates, some of 20% and more. Inflation fell as they started preparing for the euro and, since its introduction, has remained around 2% in the euro area.
In these kinds of plans, throughout the course of our working life, we contribute a certain percentage of our earnings on a regular basis into our company's general pension fund, and when we retire, we are guaranteed a monthly payment for life, with the amount of that payment calculated based on various factors such as our age at retirement, our pre-retirement salary, and other factors. However, employers these days are more likely to offer a defined contribution retirement plan, the most popular of which is the 401(k) plan. Employees can elect to
The other reason was adjustable mortgage rates. Adjustable mortgages allowed banks to increase the monthly balance, when monthly payments were not large enough to cover principal and interest, which made loan takers to pay more payment that what they were not accepting. This caused owners to owe more on their loans than its market value with an inability to refinance. Lehman Brother’s was also in Commercial paper lending market and they were one of the largest commercial paper lending institutions in the world. Commercial paper lending market is short-term debt that big businesses and financial institutions sell primarily to money market fund managers and other institutional investors.
These are people who will sit down with you and look at your income, debts, and current monthly expenses and so on. They will let you know how much you can afford. Once you know what you can afford to spend on your home you
The annual growth rate is I in the following equation: $1(1 + I)10 = $2. We can find I in the equation above as follows: Using a financial calculator input N = 10, PV = -1, PMT = 0, FV = 2, and I/YR = ? Solving for I/YR you obtain 7.18%. Viewed another way, if earnings had grown at the rate of 10% per year for 10 years, then EPS would have increased from $1.00 to $2.59, found as follows: Using a financial calculator, input N = 10, I/YR = 10, PV = -1, PMT = 0, and FV = ?. Solving for FV you obtain $2.59.
More things can affect how the ECB reacts when I comes to inflation and mostly targets a broader price index that includes things that doesn’t bother the FEDs as much, such as the Libya-related oil spike in 2011. (Bagus 2011) When the 2008 financial crisis was at its worst, the FED began an emergency lending program to ensure money continue to flow through the economy. $3.3 trillion was loaned to U.S. banks, European Banks, General Electric, McDonald’s and anyone and everyone who needed help. They also boosted the economy by buying more than $2 trillion of mortgage-backed securities and other bonds. (Hanna 2011) The FED generally acts as a lender at the last resort to help give the economy a need boost.
Installment loan. Feedback That’s incorrect. A manufacturer with seasonal sales would be most likely to obtain an unsecured short-term term loan from a commercial bank to finance the need for a fixed amount of additional capital during the busy season. Question 3 of 100 (2A2-CQ09) Maydale Inc.’s financial statements show the following information. Flag for Review http://imalc.mycrowdwisdom.com/diweb/?wicket:bookmarkablePage=:com.digitalignite.mo... 4/9/2013 Digital Ignite :: Test Engine Page 2 of 54 Maydale’s accounts receivable turnover ratio is
For example, if interest rates increase, the income of homeowners who have variable-rate mortgages will fall – leading to a decline in their effective purchasing power. The effects of a rate change are greater when the level of existing mortgage debt is high, leading to a rise in debt-servicing burdens for home-owners. On the other hand, a rise in interest rates boosts the disposable income of people who have paid off their mortgage and who have positive net savings in bank and building society accounts. Consumer demand for credit would also increase Aggregate Demand, as higher interest rates increase the cost of servicing debt on credit cards and should lead to a deceleration in the growth of retail sales and