In order to buy a vacation home, Neal and Lilly took out a 30-year mortgage for $250,000 at an annual interest rate of 12%. After 10 years, they refinanced the unpaid balance of $233,322 at an annual rate of 8%. Use the table to find the monthly payments on the original loan, the monthly payments on the new loan; and the total amount saved on interest by refinancing Click the icon to view a table of monthly payments on a $1,000 loan.

Q: Define special purpose entity (SPE)

A: A special purpose entity is a legally separate enterprise that bears liability to an organization.…

Q: Define carried interest

A: Carried interest: It could be a portion of any profit that private equity and hedge reserves common…

Q: How is ARR calculated?

A: ARR: Accounting Rate of Return (ARR) is the rate of return earned on the investment made in a…

Q: The components of the conceptual framework ?

A:

Q: practical issues of wacc

A: Every entity uses a mix of equity and debt to fund its operations. This mix is recognized as the…

Q: How is RI calculated?

A:

Q: Define the term realization principle.

A: Accounting: Accounting refers to the information system, where the economic activities of a…

Q: Consistency Principal Definition

A: Generally Accepted Accounting Principles (GAAP):These are the guidelines necessary to create…

Q: Define characteristic line

A: Characteristic line is a graphical representation of alpha (α) where alpha is the difference between…

Q: Describe Caveats?

A: A notice that is given to the court that it must give caveator a fair hearing before making any…

Q: Define charter

A: Introduction: Charters are legalized documents that lawfully set up corporate companies. Only…

Q: Discus the elements of GAAS, how does it relate to GAAP?

A: GAAS(Generally Accepted Auditing Standards) :- provides standards by which the prepared financial…

Q: What is the relevant range?

A: The concept of relevant range is used in the cost accounting. It tells under what level of…

Q: Define direct quote

A: A direct quote can be computed using the following formula: Direct quote=1Indirect quote

Q: What is a cfar?

A: Cash Flow at Risk (CFAR):Cash Flow at Risk is a term which focuses on the risk of receivables and…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.