As a teenager, Enrique learned a valuable lesson from his dad, who told him to invest $1,000 at 8 percent interest at age 20 and
1 answer:
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Answer:
a. The monthly payment on loan 1 is $76.03.
b. The monthly payment on loan 2 is $411.69.
Explanation:
a. Calculate the monthly payment on loan 1.
To determine the amount of periodic payments, the present value of annuity formula should be used:
Where:
PV= present value
p=periodic payment
i=rate of interest
n=number of periods
We get the data for this exercise:
PV= 3,600 (loan).
p= unknown (we must find this value)
i= 6.6% or 0.066. However, because we need to know the monthly payment, the interest rate should be divided by 12 (0.066 / 12).
n= 4 years and 7 months, that is 55 months.
And we replace in the formula:
Therefore:
The monthly payment on loan 1 is $76.03.
b. Calculate the monthly payment on loan 2.
We get the data for this exercise:
PV= 11,600 (loan 2).
p= unknown (we must find this value)
i= 7.3% or 0.073. However, because we need to know the monthly payment, the interest rate should be divided by 12 (0.073 / 12).
n= 2 years and 7 months, that is 31 months.
And we replace in the formula:
Therefore:
The monthly payment on loan 2 is $411.69.
Answer:
50% share.
Explanation:
Given:
There are only three firms in a market.
The largest firm has sales of $500 million.
The second-largest has sales of $300 million.
The smallest has sales of $200 million.
Question asked:
The market share of the largest firm is ?
Solution:
As we know:
Total sales of the largest company = $500 million.
Total sales of the market = Sales of largest firm + Sales of second largest firm+ Sales of smallest firm
Total sales of the market = $500 million + $300 million + $200 million
= $1000 million
Therefore, the market share of the largest firm is 50%.