ADMS 3541 Winter 2016 Assignment 1 Due at the start of class in Week 8 (Section R on March 3,2016) 100 marks, 25 each question. Instructions: Each group must submit the assignment to the instructor at the beginning of class on the date the assignment is due. Textual portions must be typed and double-spaced. This does not include variables, labels and brief notes of explanation. Use at least one inch margins all around. 1. Double-sided is preferred, if you can do it with your printer. 2. Use 8 ½ X 11 paper only. 3. Do not use report covers. 4. Staple your assignment prior to handing it in. 5. Be sure to print clearly your names, student numbers, section and Assignment 1 at the top of the first page. 6. Spelling and …show more content…
Question 2: Debt and credit management Magda is a successful lawyer. She earns $7,500 net monthly from her practice and all of her personal expenses monthly sum up to $6,400. She is looking to get a loan to purchase her dream car. The car costs $65,000. She has $10,000 to put down on the purchase. She can get a loan from the bank for 3.75% compounded monthly or the dealer offers her a loan for 2.99% compounded monthly with no money down. Therefore, she has the option of putting the $10,000 into the car purchase if she goes with the bank, or keeping it in case she wants to buy fancy rims if she goes with the dealer. Both options are for a 5 year term. Magda’s sister Amanda is always in competition with her so she is getting a better car and also needs a loan. Amanda is an electrician. She earns $4,000 net monthly and her monthly personal expenses sum up to $3,150. The car costs $82,500. She has no money to put down. The dealer has offered her a loan for 4.25% compounded monthly on a 5 year term. a) What is the monthly payment for each Magda and Amanda assuming Magda selects the bank loan? b) Should Magda select the loan from the bank or the dealer? Include calculations to support your response including total interest paid on each option. c) Based on the information provided discuss why Magda has more options for the loan and a lower rate. d) Can they afford their respective cars? Why or why not, support your response with figures.
According to the conditions above, what should their monthly payment be? If Kelsey and Cody do not send their payment in on time, what will the following month’s payment be?
The fixed cost is assumed that Larry has discovered the other fixed cost incurred. The total investment is $800,000. The worst case scenario assumes that Larry got a total line of credit from the bank in the amount of $400,000 and invested $400,000 from other source. The Notes payable – short term and the long-term debt is (11.8 + 3.7) = 15.5 % from Table F in the handout. The Loan interest and payment per year is ($400,000 * 0.155)= $62,000. The Income data from Table F indicates that there is a 0.4% of all other expenses net out of the total sales which equals to $109,908 (5,700,666 gallons * $4.82 *0.4%) .
Jim and Laura Buyer visit the local car dealership because they are interested in buying a new car. The car they currently have is aging and is starting to have mechanical problems. Jim and Laura would share the new car, and use it to go back and forth to work and school. Before going to the dealership, Jim and Laura decide that they can only afford $400.00 a month in car payments.
The economy can be impacted by the U.S.government through two major types of economic policy. The first type is called fiscal policy, which is economic policy instigated by the President or by Congress. The fundamental tools at the disposal of these branches of government are taxation law and government spending. By changing tax laws, the government can effectively affect my personal finance by modifying the amount of disposable
Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding.
The company has an agreement with a bank that allows the company to borrow the exact amount needed at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company will pay the bank all of the accrued interest on the loan and as much of the loan as possible while still retaining at least $50,000 in cash.
1. Clarissa is considering two job offers. One has an annual salary of $61.1K and the other
Madeline Rollins is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Madeline is living at home and works in a shoe store, earning a gross income of $920 per month. Her employer deducts a total of $150 for taxes from her monthly pay. Madeline also pays $105 on several credit card debts each month. The loan she needs for physical therapy school will cost an additional $150 per month. Help Madeline make her decision by calculating her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (LO 5.3)
A second mortgage loan officer, Sarah Harris, agreed to a $450,000 mortgage for a 20-year period at 8% interest rate after appraisal based on an income approach using 10.9% capitalization rate. Although not certain of her judgment, she considered Alexander’s projected figures realistic, but required him to personally sign the note as additional protection to the bank against loss.
c. Smaller payments mean more time in debt. d. Your lower interest loans also get rolled into the deal so you end up with minimal savings.
a. How much would the payment be if rate of interest is 5% and you only financed the truck for 48 months?
Save the file in your course folder, and name it with Assignment, the section number, and your first initial and last name. For example, Jessie Robinson's assignment 1R for Section 1 would be named Assignment1JRobinson.
Panna wants to buy a new suite of furniture for her flat. The furniture costs £3000 from a furniture store in her local town. The saleswoman suggests that Panna takes out a loan from the store’s finance company to fund the purchase of the furniture. The repayment loan from the finance company would be at a fixed APR of 9 per cent for a repayment term of between one and four years, which Panna can select herself. The loan would take the form of a secured loan.
At an interest rate of 15% per year (3.75% for three months, the amount to borrow equals
Scenario 2 shows the practice having moderate growth and there is no decrease in the associate fee. Even though the growth rate is 8% and not 17.5%, the company can still repay the loan because the CATO is positive throughout the years. Miller might not be able to repay the loan that fast, like scenario 1, but would be able to repay it in 10 years.