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Is the straight-line amortization or effective interest rate method better?
Wiki User
∙ 14y ago
This method is preferred over the straight-line method of amortizing bond discount or bond premium. Amortization of a bond discount or premium is the difference between the interest expense and the nominal interest payment. The amortization entry is: Interest Expense (effective interest rate x carrying value) Cash (nominal interest rate x face value) Bond Discount (for the difference)
Wiki User
∙ 14y ago
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Which Americans are most likely to join interest groups?
People with better than average incomes
What is the difference between potential gross income and effective gross income?
One is better than the other.
Is it better to purchase on credit or purchasefor cash?
Cash purchases are better because an individual pays the full amount for a good and might be lucky for a discount where as in a credit purchase the individual tends to pay monthly installments and an amount of interest in every installment
What is the accounting entries for purchasing a car on installment basis?
Credit to Liabilities for the amount of the loan. Credit to liabilitites for the amount of interest on the amount of the loan.(this can be entered monthly to keep better track of) Debit to cash for the amount of the payment made. (this amount should be equal after the payments are completed to the addition of the loan amount and interest.)
Why is a savings account better than a checking account?
A savings account may pay higher interest rate than a checking account. Also, you don't have bounced checks, and NSF fees, normally.
Which is a better loan to obtain, an Amortization Loan or a a Bullet Loan?
Amortization Loans and Bullet Loans both have their advantages and disadvantages. If you plan to pay the loan back right a way, a Bullet Loan would be a good choice for you, however if you plan to pay the loan back over an extended time, an Amortization loan might suit you better.
Is viper vs zr1 drag winner?
Chevy zr1 is the better of the two in 0-60 run,straightline track. Viper is slower but on tracks where speed is not always better viper wins
What exactly does the term negative amortization refer to?
Basically negative amortization simply refers to the amount of money being paid towards the lender and the interest rate for a loan. In some cases it can be useful to keep payments lower in the beginning of a loan, but later on in order to pay off the full amount, the payments must be increased. A mortgage expert can help you to better understand this concept at www.mtgprofessor.com.
What is better a higher or a lower percentage?
If you are receiving interest on an assett, a higher interest is better. If you are paying interest on a debit, a lower interest is better.
Reasons To Pay Attention To Amortization Tables?
Many households who have loans, mortgages or other scheduled payments on a borrowed sum of money receive amortization tables from the lender. These tables are actually very important and useful for a number of reasons when determining present and future household finances. The tables show how much of each scheduled payment during the life of the loan contributes towards paying down the principal and how much goes towards interest. While this might seem like a trivial distinction, there are actually several reasons to pay attention to this data. Amortization tables for mortgages or automobile loans can be used to determine exactly how much equity is held in the asset. This means that the actual value of a home or car can be determined by calculating how much principal has been paid instead of interest. This can be useful when making long-term financial plans or when applying for new loans or lines of credit. It is also essential when engaging in certain debt relief solutions. Amortization tables play an important role in refinancing and planning. The amount of interest that is paid is a percentage of the principal remaining. This means that most of the early payments are spent on interest and later payments are primarily paying down the principal. The amount of interest paid each period can be reduced by making additional payments to lower the principal of the loan. This could mean making one to two extra payments every few months. The adjusted amortization table will show small savings each year because of this. Discovering exactly how much money is saved in this way require the use of an amortization calculator. Amortization tables are one way to compare different loan offers from different lenders. The simple numbers such as the length of the loan or the interest rates are not enough to determine which loan is a better deal. The tables will clearly show how much money is paid towards interest before the principal is paid off completely. Some loans might have two to three times the amount of interest when amortized when compared to other offers. These tables are really the only way to determine the cost of a loan in interest.
What type of interest is better to have when applying for a loan?
A+ Simple Interest
Is it better to have a credit card with a high interest rate or low interest rate?
If you carry a balance, then it's better to have a low interest rate. If you do not carry a balance, then the interest rate doesn't matter at all.
Why is the sponge a better contraceptive?
Better than...? It's not very effective.
Interest on maturity is better or monthly interest?
If you need a monthly income then obviously a monthly income is better. If the monthly interest is not withdrawn then it makes no difference because the annual interest rate is usually equal to the compounded monthly rate.
What is the difference between simple interest and compound interest is one better than the other why or why not?
With compound interest, after the first period you interest is calculated, not only on the original amount but also on the amount of interest from earlier periods. As to "better" or not, the answer depends on whether you are earning it on savings or paying it on borrowing!
Which has better interest Sonny or apple?
apple
When you are earning interest is it better to have high or low rates?
High rates.However, high interest rates are usually a consequence of high inflation rates and so what matters is not the interest rate but the real interest rate which is the nominal interest rate relative to the inflation rate.Thus a 3% interest rate when inflation is 1% is better that a 5% interest rate when inflation is 4%.
