uires R100 000 in finance to start her business. Mr Khumalo, her father, has agreed to provide her with R50 000 as capital and in return, she will pay him 2% of the profits she makes each year. SABSA Bank agreed to provide her with a loan of R50 000 which she will pay off in 5 equal instalments. Interest on this loan is 10% per annum. Mulalo has already secured an order for 12 evening dresses for the 12 Miss South Africa contestants. Required: From the scenario above, identify three users of financial information and explain how they benefit from accounting information supplie

Q: uestions below

A: Compound interest is used in case of lump-sum money accumulates in the future if interest is charged…

Q: Kiki bought a computer for Rp. 8,000,000, -. If he bought it With credit, he must prepare advance…

A: The portion of the purchase price of goods and services that are paid immediately at the time of…

Q: Imelda took a loan of Php 950,000 from a financial institution to purchase a TV. If the company…

A: Compound Interest is also called interest on interest. It is the addition of interest in the…

Q: Maria saved money for her dream house but she needed Php700,000 more to complete the deal. The banks…

A: We take loans or mortgages to purchase large ticket items like a car or a house. The loan or the…

Q: Sarah is the owner of Sunshine Bakery. Sunshine Bakery produces 10,000 units of bread per year and…

A: Accounting profit is computed by deducting business expenses from revenue; whereas, economic profit…

Q: a. Kim pays ₱2,000 every two months to settle his obligation for two years at 8% compounded…

A: a. The present value can be calculated using the PV Function.  b. The monthly payment can be…

Q: Jewels can expect a total of $17,125 + $29,000 = $46,125 in student loans when she graduates from…

A: Data given: Student loan= $46,125 Total interest=$3,690 Allowable deduction=$2500 Tax rate=22%…

Q: Frank is lending $1,000 to Sarah for two years. Frank and Sarah agree that Frank should earn a real…

A: To determine the nominal rate of interest that Frank should charge Sarah, we need to account for the…

Q: Rahma borrowed OMR 600 at the rate of 12% from Bank Dhofar for 6 years. Find the interest she will…

A: Given taht, Loan amount = OMR600 Rate of interest = 12% Number of year for which loan has taken =…

Q: b. Calculate the upfront amount that she should pay under the alternative payment agreement so that…

A: Equivalent value today is present value of both payments based on time and interest rate off money…

Q: Alan borrowed $30000 from Janet due in 5 years at 10% monthly. 2 years after the debt is contracted,…

A: present value=future value1+rmm×n

Q: must she

A: An installment that is paid on monthly basis is called PMT. A fixed amount of interest is to be…

Q: Sara opens a brokerage account and purchases 400 shares of Tesla at $20 per share She borrows $3,000…

A: Any one wishes to trade in stock have to open account with broker and keep margin in broker account…

Q: Tara has just bought a house for $930,000 with a 30% down payment and a 70% mortgage loan for 20…

A: Given: Cost of house = $930,000 Down payment = 30% Interest rate = 2.19% Years = 20

Q: Akbar bought a car on loan and pays the simple interest at 5% amounting to RO 3,000 per annum for 5…

A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…

Q: Cedie is saving in a bank in order to purchase a new house in six years. He anticipates that the…

A: Price of the house = PHP 1,500,000 Interest rate = 0.055 (i.e. 5.5%) Amount deposited (Year 1) = PHP…

Q: Erica has just purchased a new personality from I Spy a New You, LLC for $1250. She put exactly 25%…

A: Using excel PMT function

Q: 5. Masuku agrees to pay R250 at the beginning of each year for 15 years. If money is worth 42% p.a.…

A: In annuity due there are payments at the beginning of period and these are constant level payments…

Q: Ali buys an apartment for RM150,000. He makes a 10% down payment and finances the balance through…

A: Loan amount (L) = Price - Down payment = 90% of RM 150000 = RM 135000 Monthly payment (M) = RM…

Q: Emilio desires $9,000 as the proceeds of a 90-day loan from Winston who charges 5% interest in…

A: Time has been valuable in all aspects but in terms of finance, time has a money value. The worth of…

Q: imana wants to buy a two bedroom apartment in Rockycrest for N$680000. he is expected to pay 9%…

A: To calculate the total amount of money Imana will pay to the bank over 22 years, we need to break…

Q: Lia plans to buy a house for Php 157,950. She wants to make a down payment of Php 24, 937 and to…

A: Mortgage- A mortgage is a sort of loan used to buy or maintain tangible assets such as a home,…

Q: make regular equal payments to repay the loan. The payments will be semi-annual for 10 years with…

A: Loans are paid by by equal periodic payments that carry the payment of interest and payment of…

Q: years ses to pay Ph How much is the payment on the fourth year if money is worth 16% compounded…

A: In this we need to calculate the present value of all and than calculate the required amount.

Q: Nur's father bought a car for RM104,000. He paid an advance of RM24,000 and the balance will be paid…

A:

Q: Stephanie borrows Php77,000 for 10 months at an interest rate of 12% per year. Find the interest…

A: Interest earned refers to the product of amount invested/borrowed, time period and interest rate.

Q: Kween Yazmine's mother borrowed Php35,000 to fix their car. The bank charges 5% interest for two…

A: Borrowed amount (PV) = Php 35,000 Interest rate (r) = 5% Period (n) = 2 Years

Q: Donna enters into an investment contract that will guarantee her 4% per year if she deposits $3,500…

A: The future value of the investments can be calculated using the FV Function in excel.FV = (RATE,…

Q: Jane Doe earns $41,400 per year and has applied for a(n) $89,000, 25-year mortgage at 7 percent…

A: Amount available for mortgage payment= Debt Service Ratio * Monthly income -  Monthly Property taxes

Q: Lily signed a personal loan for $7,500 with Joanne, her aunt, to pay her MBA tuition fees during the…

A: The lender is the one who lends the money to the borrower. The lender meets the financial need of…

Q: Peter takes out a loan of R1000000 to start a new business. After 14 years his business grows and he…

A: In the given question, no details are given regarding re-payments i.e whether any monthly or annual…

Q: Khairul secured a bank loan of RM 180,000 to help the purchase of a house. The mortgage is to be…

A: A mortgage is a loan obtained to purchase a property, such as a house or a piece of land. The…

Q: Linda's salary is $49000 a year. As a part of it's incentive program the company decides to give her…

A: Salary For Year 1 = s1 = $49,000Growth Amount = g = $1000Discount Rate = r = 6.2%

Q: Davadene has two student loans. one is for $8000 at an APR of 5% for 10 years; the second is for…

A: Given, loan one is for $8000 at an APR of 5% for 10 years; loan second is for $15,000 at an interest…

Q: After earning a BS Electrical Engineering degree, Jess decided to start his own business. His rich,…

A: Borrowings are the liability that is used to finance the requirement of the funds. The borrower…

Q: a mother earned $15000.00 from royalties on her cookbook. She set aside 20% of this for a down…

A: Amount earned in royalties is $15,000 Amount set aside is 20% Amount invested is 15000×1-20%=…

Q: Patricia promises to pay Patsy $2400.00 plus interest at 8% in one year. After 3 months passed, she…

A: Time has been valuable in all aspects but in terms of finance, time has a money value. The worth of…

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.