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Instead of paying monthly I want to pay in full. What is the earned and unpaid part of the finance charge that I must pay?
Wiki User
∙ 16y ago
Contact lender and find out what payoff balance is
Wiki User
∙ 16y ago
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How is an implicit finance charge calculated?
Implicit costs are opportunity costs which occurs due to a selection of choice. Suppose you want to deal with Client A instead of Client B. The implicit charge would be the amount you would have earned, had you worked with Client B.
What is the monthly interest earned on 175000.00 at 5?
729.17
If a firm has both interest expense and lease payments would times interest earned be smaller than fixed charge coverage?
times interest earned be smaller than fixed charge coverage
What is the monthly salary of president and vice president?
That depends if you only include income earned directly from being president the annual salary is $400,000. The annual income earned directly from being vice president is $230,700. If you divide these numbers by 12 you will get the monthly salaries of the president and vice president.
Is it better to buy a house or rent a condo?
As a General Rule, Its smarter to build up your own equity on being a Homeowner. Instead of putting your hard-earned money in renting. However, there are some things to consider: 1. The location of the House versus workplace. 2. Size and amount of the house. If the monthly payment is similar to renting a condo space. Might be smarter to buy instead.
How is a refund calculated on a precomputed loan?
A precomputed account is one in which the debt is expressed as a sum comprising the principal and the amount of the finance charge computed in advance. The total amount of each payment is subtracted from the balance which includes the principal and finance charges (interest). A simple interest (interest bearing) account is one in which the balance includes only the principal amount and the interest calculated from payment date to payment date is subtracted from the total amount of the payment and the remainder of the payment is subtracted from the principal balance. A precomputed account and a simple interest account with the same amount financed or principal balance, the same annual percentage rate and the same terms will have the same finance charge. If both accounts have payments made as contracted for the full term of the obligation, the finance charge will be the same for both accounts. The differences between the two accounts are in how payments to the accounts are actually made during the term. Delinquency Charges: Both types of accounts can have delinquency charges imposed if payments are not received within usually10 days of the date the payment is due. On a simple interest account you will also be paying interest for the days delinquent on a higher balance than the original total finance charge was computed, making you pay more finance charges than originally contracted. If you were over 10 days late in making your payments each month on an account with a $5,000 original unpaid balance with a 21% annual percentage rate for 24 months, you would pay $372.00 in delinquency charges on a precomputed account. You would have paid the $372 00 delinquency charges plus additional interest (finance charges) on any unpaid delinquency charges and the higher principal balance due to the delinquency on a simple interest account. Deferral Charges: Precomputed accounts can have a deferral charge imposed, if contracted for, on payments past due over 10 days. Deferral charges are based on the balance deferred times the annual percentage rate divided by 12. Deferral charges are not allowed on simple interest accounts. However, you would be paying a higher finance charge then originally contracted if your payments were delinquent or the lender allowed you to make an "interest only" payment. As you can see from the example above, being delinquent in your payments can be very costly over the term of an account plus being delinquent is reported on your credit records and future credit may be hard to secure. Prepayments in full: When you prepay a simple interest account , you owe the principal balance plus interest accrued since the previous payment. There is no rebate. When you want to pay off a precomputed account ahead of your contractual obligation, you are entitled to a rebate of the unearned finance charge based on the sum of the balances known as the Rule of 78's. The balance of a precomputed account includes the total finance for the full term of the contract. If it is prepaid in full before the maturity date, the unearned finance charges are subtracted from the balance to arrive at the amount due at time of the prepayment in full. The Rule of 78's is so named because a hypothetical installment account with a term of 12 months has 78 units calculated by adding the numbers 1 plus 2 plus 3 through 12. To compute the Rule of 78's decimal you take the number of months remaining in the term of the contract times that number plus 1. You divide that number by the number of months in the term times the term plus 1. The Rule of 78's decimal is then taken times the finance charge to compute the rebate. EXAMPLE: $5,000.00 amount financed $1,166.32 finance charge 24 payments of $256.93 21% annual percentage rate Date made 1-10-02 First payment due 2-10-02 Date prepaid 11-11-02 There are 11 months earned on the account (the creditor can take a full months earnings for 1 day into the next month in this example) and 13 months unearned. You can compute the rebate as follows: 13 X 14 divided by 24 X 25 = 182 divided by 600 = .3033 Rule of 78's decimal $1,166.32 X .3033 = $353.74 The finance charge rebate would be $353.74. The lender earned 69.67% of the total finance charge during the first 11 months of the 24 month contract. Finance charges earned by the Rule of 78s are the highest for the first months of the term because the balance of the amount financed is highest during that period. You can look at the following chart to see that the earned finance charge would be $812.54 after 11 months. A simple interest account with the same terms which was paid on the contracted due date each month and prepaid on 11/11/00 would have finance charges earned of $737.10, the unearned finance charge would be $429.22 (earning on for 10th month plus one day's interest) which is $75.48 less total finance charges then the precomputed account. If the account had prepaid on 11/10/00 (exactly 10 months), the total finance charge on the precomputed account would have been $758.11 ($1,166.32-408.21). This is still $22.96 more then the simple interest earned finance charge of $735.15 ($1,166.32-431.17). From the examples given, you can see that if you make your payments as contracted each month and prepay your account, a simple interest account will cost you less than a precomputed account. If you do not pay your account in full before the maturity date and pay as contracted for the full term of the account, there would be no difference in the cost between a precomputed account and a simple interest account. On the other hand, if you are constantly delinquent on your payments, a simple interest account will result in higher finance charges. A precomputed account is one in which the debt is expressed as a sum comprising the principal and the amount of the finance charge computed in advance. The total amount of each payment is subtracted from the balance which includes the principal and finance charges (interest). A simple interest (interest bearing) account is one in which the balance includes only the principal amount and the interest calculated from payment date to payment date is subtracted from the total amount of the payment and the remainder of the payment is subtracted from the principal balance. A precomputed account and a simple interest account with the same amount financed or principal balance, the same annual percentage rate and the same terms will have the same finance charge. If both accounts have payments made as contracted for the full term of the obligation, the finance charge will be the same for both accounts. The differences between the two accounts are in how payments to the accounts are actually made during the term. Delinquency Charges: Both types of accounts can have delinquency charges imposed if payments are not received within usually10 days of the date the payment is due. On a simple interest account you will also be paying interest for the days delinquent on a higher balance than the original total finance charge was computed, making you pay more finance charges than originally contracted. If you were over 10 days late in making your payments each month on an account with a $5,000 original unpaid balance with a 21% annual percentage rate for 24 months, you would pay $372.00 in delinquency charges on a precomputed account. You would have paid the $372 00 delinquency charges plus additional interest (finance charges) on any unpaid delinquency charges and the higher principal balance due to the delinquency on a simple interest account. Deferral Charges: Precomputed accounts can have a deferral charge imposed, if contracted for, on payments past due over 10 days. Deferral charges are based on the balance deferred times the annual percentage rate divided by 12. Deferral charges are not allowed on simple interest accounts. However, you would be paying a higher finance charge then originally contracted if your payments were delinquent or the lender allowed you to make an "interest only" payment. As you can see from the example above, being delinquent in your payments can be very costly over the term of an account plus being delinquent is reported on your credit records and future credit may be hard to secure. Prepayments in full: When you prepay a simple interest account , you owe the principal balance plus interest accrued since the previous payment. There is no rebate. When you want to pay off a precomputed account ahead of your contractual obligation, you are entitled to a rebate of the unearned finance charge based on the sum of the balances known as the Rule of 78's. The balance of a precomputed account includes the total finance for the full term of the contract. If it is prepaid in full before the maturity date, the unearned finance charges are subtracted from the balance to arrive at the amount due at time of the prepayment in full. The Rule of 78's is so named because a hypothetical installment account with a term of 12 months has 78 units calculated by adding the numbers 1 plus 2 plus 3 through 12. To compute the Rule of 78's decimal you take the number of months remaining in the term of the contract times that number plus 1. You divide that number by the number of months in the term times the term plus 1. The Rule of 78's decimal is then taken times the finance charge to compute the rebate. EXAMPLE: $5,000.00 amount financed $1,166.32 finance charge 24 payments of $256.93 21% annual percentage rate Date made 1-10-02 First payment due 2-10-02 Date prepaid 11-11-02 There are 11 months earned on the account (the creditor can take a full months earnings for 1 day into the next month in this example) and 13 months unearned. You can compute the rebate as follows: 13 X 14 divided by 24 X 25 = 182 divided by 600 = .3033 Rule of 78's decimal $1,166.32 X .3033 = $353.74 The finance charge rebate would be $353.74. The lender earned 69.67% of the total finance charge during the first 11 months of the 24 month contract. Finance charges earned by the Rule of 78s are the highest for the first months of the term because the balance of the amount financed is highest during that period. You can look at the following chart to see that the earned finance charge would be $812.54 after 11 months. A simple interest account with the same terms which was paid on the contracted due date each month and prepaid on 11/11/00 would have finance charges earned of $737.10, the unearned finance charge would be $429.22 (earning on for 10th month plus one day's interest) which is $75.48 less total finance charges then the precomputed account. If the account had prepaid on 11/10/00 (exactly 10 months), the total finance charge on the precomputed account would have been $758.11 ($1,166.32-408.21). This is still $22.96 more then the simple interest earned finance charge of $735.15 ($1,166.32-431.17). From the examples given, you can see that if you make your payments as contracted each month and prepay your account, a simple interest account will cost you less than a precomputed account. If you do not pay your account in full before the maturity date and pay as contracted for the full term of the account, there would be no difference in the cost between a precomputed account and a simple interest account. On the other hand, if you are constantly delinquent on your payments, a simple interest account will result in higher finance charges.
When is it not an earned run in baseball?
An earned run is a run that the pitcher is held responsible for so if the pitcher gives up a home run that 1 earned run you probably already knew that. Instead if the pitcher pitches and then the ball is hit into the outfield and a outfielder drops it and a run comes in that would not be an earned run.
What is different between account sale and sale account?
when revenue is earned from charge-account sales, the accountant debits __________ and credits___________
What is the difference between sales account and account sales?
when revenue is earned from charge-account sales, the accountant debits __________ and credits___________
What is the difference between sales account and account sale?
when revenue is earned from charge-account sales, the accountant debits __________ and credits___________
Adjust the annual formula for a future value?
monthly compounding is the better way to go, because your money earned through 7% monthly is compounded the next month with the original 7% monthly plus the new amount. Each month there after includes all the previous months and end the end of one year, you are ahead of the amount than a one time 7% annual compound.
Can you enter foreign earned income in line 21 of form 1040 instead of Line 7 since there is no W2?
Yep
