Answer:
5.75%
Explanation:
to determine the effective cost of the debt, we can use an excel spreadsheet and the IRR function:
- present value = -1,016
- payments 1 - 7 = 90
- payment 8 = 1,090
effective interest rate = 8.71%
we can also calculate the answer using the annuity and present value formula:
1,016 = [90 x ({1 - [1 / (1 + i)⁸]} / i)] + [1,000 / (1 + i)⁸]
but it's much more complicated and the result is the same.
since the effective interest rate = 8.71%, then the after tax rate = 8.71% x (1 - 34%) = 8.71% x 0.66 = 5.7486% ≈ 5.75%
This kind of reasoning is said to be DEDUCTIVE REASONING.
Deductive reasoning is the process of reasoning based on multiple premises that are generally believed to be true. Deductive reasoning usually moves from the general to the specific. For instance, in the question given above, Jason reasoned that if other products are sold at discounted prices, then the items that are newly available will also be sold at discounted prices.
Answer:
D. $2000
Explanation:
Calculation to determine How much will the insurance company pay in this scenario
Using this formula
Amount to pay=Total damages -Deductible homeowner’s policy covering flood damage
Let plug in the formula
Amount to pay=$2,500-$500
Amount to pay=$2,000
Therefore How much will the insurance company pay in this scenario will be $2,000
