Finance Answers

What does the product 𝐿12×𝑖12 represent?

a.

Nothing. This expression is complete nonsense.

b.

the interest component of the 13𝑡ℎ payment

c.

The interest paid in the second year.

d.

the interest component of the 12𝑡ℎ payment

What does the difference 𝐿0−𝐿12 represent?

a.

The interest paid in the first year of the loan.

b.

The principal repaid in the first year of the loan.

c.

The principal repaid in the first 12 years of the loan.

d.

None of the other choices are correct

The last payment for the loan occurs on 1 July 2044. For the next question, we will refer to 2044 as the "final year". Type in the "final year" below (i.e. if the last payment occurs in 2031, type in 2031).

Calculate the equivalent effective monthly rate. Give your answer as a percentage to 4 decimal places, and do NOT include a percentage sign

The interest rate for the loan is 5.6% p.a. effective. Calcualte the equivalent nominal annual rate compounding monthly. Give your answer as a percentage to 4 decimal places, and do NOT include a percentage sign.

The interest rate for the loan is an effective annual rate. Which of the following is the best next step before trying to calculate the required monthly repayment for the mortgage?

a.

Divide the rate by 12 to work in months

b.

Convert the rate to a nominal annual rate compounding monthly, and use this new rate directly to calculate the monthly repayments.

c.

No interest rate conversion is needed. The rate can be used directly.

d.

Convert the rate to an effective monthly rate, and use this rate directly to calculate the monthly repayments.

Explain the association of the following diagram (hints: the association has directions; from sales order to customers, and from customers to sales orders)?

What is segregation of duties and why internal controls need segregation of duties?

If the national debt of a country (in trillions of dollars)tyears from now is given by the indicated function, find the relative rate of change of the debt12years from now. (Round your answer to two decimal places.)

N(t) =0.6+1.3e^0.01t

To what extend does financial planning influences investors and business owner’s financing decision.?

Auto Insurance and the Black Box

The chapter talks about the lack of information regarding insurance. I found an article about installing a box from your auto insurance company that monitors your driving. The idea is, if you drive less or if you are a safe driver the insurance company will reduce your insurance premiums. In fact, in most cases the box may have been a prop, however, people still were driving safer.

Covid-19 has changed a lot of Americans driving habits. If you are no longer driving to work did your insurance company reduce your rates?

The article talks about how your insurance carrier can reduce rates based on how far you drive and how safe you drive.in some cases, the companies may give you an empty box without you knowing it and you will still modify your driving. What do you think about this and how would you tie it to the chapter? Do you believe these practices are good ways to reduce insurance rates?