Many tax preparation firms offer their clients a refund anticipation loan (RAL). For a fee, the firm will give a client his refund when the return is filed. The loan is repaid when the Internal Revenue Service sends the refund directly to the firm. Thus, the RAL fee is equivalent to the interest charge for a loan. The schedule in the table on the right is from a major RAL lender. Use this schedule to find the annual rate of interest for a $4,321 RAL, which is paid back in 30 days. RAL Amount $0-$500 $501-$1,000 $1,000-$1,500 $1,501-$2,000 $2,001 - $5,000 (Assume a 360-day year.) RAL Fe $29.00 $39.00 $49.00 $69.00 $89.00
Many tax preparation firms offer their clients a refund anticipation loan (RAL). For a fee, the firm will give a client his refund when the return is filed. The loan is repaid when the Internal Revenue Service sends the refund directly to the firm. Thus, the RAL fee is equivalent to the interest charge for a loan. The schedule in the table on the right is from a major RAL lender. Use this schedule to find the annual rate of interest for a $4,321 RAL, which is paid back in 30 days. RAL Amount $0-$500 $501-$1,000 $1,000-$1,500 $1,501-$2,000 $2,001 - $5,000 (Assume a 360-day year.) RAL Fe $29.00 $39.00 $49.00 $69.00 $89.00
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 4RP
Related questions
Question
m1.
Subject
Accounting
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning