Answer:
The result of K's inaction causes an increase in the outstanding loan by $50
Explanation:
Step 1: Determine the interest amount
The interest amount can be determined as follows;
I=PRT
where;
I=interest amount
P=principal amount
R=annual interest rate
T=time
In our case;
I=unknown
P=$1,000
R=5%=5/100=0.05
T=1 year
replacing;
I=1,000×0.05×1=$50
Step 2: Determine the total loan amount
This can be expressed as;
A=P+I
where;
A=total loan amount
P=principal amount
I=interest amount
In our case;
A=unknown
P=$1,000
I=$50
replacing;
A=1,000+50=1,050
The loan amount due after a year=$1,050
The result of K's inaction causes an increase in the outstanding loan by $50
If K does not pay the loan interest on their whole life policy, the loan interest is added to the loan balance, meaning the debt increases over time. This can eventually reduce the death benefit if not repaid in a suitable time frame.
The subject of your question is in the context of insurance policy loans. If K has a $10,000 traditional whole life policy and borrowed $1,000 from the policy without repaying the loan interest at the end of the year, the 5% interest charge would compound onto the existing loan. As a result, the loan balance would increase. In specific terms, the new loan balance would be $1,050 ($1,000 original loan plus $50 interest). If this is not repaid, yearly interest will be calculated on this increased balance, leading to a further increase in the debt. This could eventually reduce the death benefit if the loan is still outstanding at the time of K's death.
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b. Income from operations
c. Net income
d. Gross profit
Answer:
(B) equilibrium price
Explanation: this is correct!
b. operating activity.
c. revenue activity.
d. investing activity
b.$550,000
c.$375,000
d.$400,000
Answer:
a. $425,000
Explanation:
Calculation of compensated absences expense for the year
Closing balance of compensated absences = $150,000
+ Payments made for compensated expenses = $400,000
- Opening balance of compensated absences = - $125,000
Compensated absences expense for the year = $425,000