Lending activities d. Financing activities 34. Dividend payments to owners should be classified as cash outflows for a. Example of Loan Payment. Face (or par) value. These regular monthly payments function like an annuity. Time deposits differ from at call deposits, such as savings or checking accounts, which can be withdrawn at any time, without any notice or penalty. C) traveler's checks . Generally, the interest payment is related to the principal amount that is owed to the lender. Answer: E . A time deposit or term deposit (in the United States also known as a certificate of deposit) is a deposit in a financial institution with a specific maturity date or a period to maturity, commonly referred to as its “term”. Therefore, the next interest payment will be smaller than the previous interest payment. Throw in the 10% down payment, and the car costs $38,497. Interest expense is a non-operating expense shown on the income statement. $_____million. Consider the following example. Example of Accrued Interest . Most lenders, such as those issuing car loans or mortgages, expect regular monthly payments that include interest and principal payments. Because you're reducing the principal balance every month, the amount of interest that accumulates is likewise reduced. 33. You would pay $35,131.80 in monthly payments. Learn the terminology for calculating a bond's interest payments. For example, receipts of investment income (interest and dividends) and payments of interest to lenders are classified as investing or financing activities. It represents interest payable on any borrowings – bonds, loans, convertible debt or lines of credit. Operating activities c. Borrowing activities b. This number tells you how much you pay per year and may include additional costs above and beyond the interest charges. Conversely, some cash flows relating to operating activities are classified as investing and financing activities. Operating activities c. Financing activities b. These items together—currency, and checking accounts in banks—make up the definition of money known as M1, which is measured daily by the Federal Reserve System. The world of bonds has its own unique terminology, and understanding these terms are necessary to be able to not only properly invest in bonds, but to calculate the interest payment of a bond. Investing activities d. Ordinary activities 35. The monthly payment on a five-year loan for $30,287 at 6% interest would be $585.53. It … C) unit of account. unanswered Insurance. Interest payments to lenders and other creditors should be classified as cash outflows for a. Show transcribed image text. Multiply the result times the principal outstanding. Additional costs: Loans are often quoted with an annual percentage rate (APR). Coins, c. Savings deposits, d. Checkable deposits. Your pure interest cost is the interest rate (not the APR). 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