User Account

All Pages

Calculate the monthly debt repayment amount

Assignment Help Accounting Basics
Reference no: EM13913139

Jon Morgan is in a financial position where owes more than he earns each month. Due to his lack of financial planning and heavy debt load, Jon started missing payments and saw his credit rating plunge. Unless corrective action is taken, personal bankruptcy will follow.

Jon recently contacted his lawyer so as to set up a wage earner plan with his creditors and establish a debt repayment schedule that is workable in light of his personal income. His creditors have all agreed to a plan under which interest payments and late fees will be waived during the repayment period. The process will have Jon make payments to the court, which will then pay off his creditors.

Jon has an outstanding debt of $28,000. His creditors have set a repayment period of 4 years during which monthly principal payments are required. They have waived all the interest charges and late fees. Jon's yearly take-home is $30,600.

a. Calculate the monthly debt repayment amount.

b. Determine how much excess income Jon will have each month after making these payments.

Reference no: EM13913139

Questions Cloud

Which duty do you believe is higher : Which duty do you believe is higher, the duty of corporations to pay tax to government or the duty of corporations to pay dividends to shareholders? Why?
Speed for the remainder : A certain sprinter has a top speed of 10.6 m/s. If the sprinter starts from rest and accelerates at a constant rate, he is able to reach his top speed in a distance of 10.1 m. He is then able to maintain his top speed for the remainder of a 100 m ..
Find the component costs for bonds and preferred stock : There are 2,000 bonds outstanding at a market price of $1090 per bond. The bonds mature in 17 years and have a coupon payment of $70 on the $1,000 face value of the bond.  Find the 3 weights to be used to determine the cost of capital (Debt, Preferre..
Calculate the monthly debt repayment amount : Jon has an outstanding debt of $28,000. His creditors have set a repayment period of 4 years during which monthly principal payments are required. They have waived all the interest charges and late fees. Jon's yearly take-home is $30,600. Calculat..
Identical in every way except their capital structures : Alpha Corporation and Beta Corporation are identical in every way except their capital structures. Alpha Corporation, an all-equity firm, has 15,000 shares of stock outstanding, currently worth $30 per share. Beta Corporation uses leverage in its cap..
Find the velocities of the balls : Find the velocities of the balls just after their collision and How high will the balls rise after collision?
Stock expects the future free cash flows : You are working on the valuation for an upcoming IPO. The company that wants to sell its stock expects the following future free cash flows (FCF, in millions of dollars): -7 in year 1, 8 in year 2, 19 in year 3, and cash flows are expected to grow st..
What should be the price per share : You are working on the valuation for an upcoming IPO. The company that wants to sell its stock expects the following future free cash flows (FCF, in millions of dollars): -7 in year 1, 8 in year 2, 19 in year 3, and cash flows are expected to grow st..

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd