1.) You have a credit card with an APR of 24%. You begin with a balance of $620. In the first month you make a payment of $450 and make new charges of $220. In the second month you make a paymen of $320 and make new charges of $90. Complete the following table. (Round VOur anSwers to tho nonrogt

1.) You have a credit card with an APR of 24%. You begin with a balance of $620. In the first month you make a payment of $450 and make new charges of $220. In the second month you make a paymen of $320 and make new charges of $90. Complete the following table. (Round VOur anSwers to tho nonrogt

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 11EB: Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase,...

See similar textbooks

Related questions

Q: Assume that you start with a balance of $3900 on your credit card. During the first month you charge…

A: A credit card is a card that is issued by the bank to the users to enable that holder to pay a…

Q: The previous statement for your credit card had a balance of $770. You make a payment of $360 but…

A: Given information: Previous balance is $770 Payment of $360 Additional purchase of $220 APR of 24%

Q: You have a balance of $400 on your credit card and make no more charges. Assume that the card…

A: Balance amount =$400 APR =18% Monthly rate = 0.18/12 =1.50% Time =6 months or 6 periods So, monthly…

Q: Suppose you deposited $1,000 in a credit union account that pays 7% with dailycompounding and a…

A: Excel Spreadsheet:

Q: Suppose your business has secured a line of credit and receives the accompanying statement of…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Prepare the following calculations. principle on a note is $ 4,000, interest rate is 5%, time is 2…

A: 1. Interest = Principle x Interest rate x Time in Years = $4000 x 5% x 2 = $400 2. Interest =…

Q: Last month, Kaitlin's average daily balance on her credit card was $1,253.38. The annual interest…

A: Given: Average daily balance on credit card "B"= $1253.38 Annual interest rate "r"=15.27% Number of…

Q: Vou have a credit card with an APR. of 16%. Vou begin with a balance of $750. In the first month you…

A: For credit card, charges are purchases on credit card and payments are payment on the balance of…

Q: The balance on a credit card, that charges a 10.5% APR interest rate, over a 1 month period is given…

A: Interest rate = 10.5% Initial balance = $150 Number of days = 1-3 is 3 days Number of days = 4-20…

Q: Assume that you have a balance of $2800 on your MasterCard and that you make no more charges. Assume…

A: Given information: Loan balance is $2,800 APR is 12% Minimum payment is 6% of balance

Q: You have a credit card with an APR of 22.8%. You begin with a balance of $1000, in response to which…

A: Finance charge Any fees that represent the credit cost, or borrowing cost. It is an interest accrued…

Q: How many payments will you have made when your account balance reaches $15,000?

A: Future Value of Annuity: It is the worth of the recurring cash flows or payments at a certain…

Q: Suppose your business has secured a line of credit and receives the accompanying statement of…

A: Limit on your line of credit - $1,000.00 Interest rate on positive balances - 1.6% p. a Interest…

Q: Determine the finance charge, new balance, and minimum payment required for each of the next two…

A: Finance charges refers to those costs or extra amount which is paid by the borrower to the lender on…

Q: Complete the following take table. Round your answer to the nearest cent. Table 1 month- Previous…

A: Month 1: Outstanding balance in beginning = 610$ APR = 24% Finance charge = 610$ * 24% * 1/12 =…

Q: Calculate the monthly finance charge for the credit card transaction. It takes 10 days for a payment…

A: We will calculate the interest on the basis of simple interest.

Q: Assume that you start with a balance of $4000 on your Visa credit card. During the first month, you…

A: Finance charges are levied by credit card companies if credit card holder fails to make payment on…

Q: Assume that you have a balance of $3400 on your credit card and that you make no more charges.…

A: Credit Card is short-term credit facility provided to retail customers by financing entities that…

Q: You have a credit card with an APR of 22.8%. You begin with a balance of $1500, in response to which…

A: The interest on the credit card is charged monthly. The amount of payment reduces the outstanding…

Q: ou have a credit card balance of $2,000 and are able to make payments of $50 per month. Assume the…

A: we need to use NPER function in excel to calculate number of periods/months. Formula is…

Q: Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days…

A: Information Provided: Balance = $4000 Rate = 16% Payment = $2500 Days it take for payment = 10 Days

Q: Assume that you start with a balance of $3600 on your credit card. During the first month, you…

A: Given Starting balance is $3600 First month charge is $400 Second month charge is $550

Q: Assume that you have a balance of $4500 on your Discover credit card and that you make no more…

A: The yearly rate that borrower pays on loan and investors receives on deposits is the annual…

Q: Suppose your business has secured a line of credit and receives the accompanying statement of…

A: Note: As per our guidelines, only the first three subparts have been answered Interest…

Q: You have a credit card with an APR of 20%. You begin with a balance of $600 in response to which you…

A: Given: APR = 20% Beginning balance = 600

Q: nth. Round all values to the nearest cent. A. What is the finance charge for this first month? B.…

A: finance fee is the interest pay on a loan you owe,If you carry a debt from one payment month to…

Q: Assume you have a credit card that has a 24% APR and you have an average daily balance of $1,500.00.…

A: Credit card companies lend a certain amount to the borrower and charge interest over that amount…

Q: Your Office Supply has a $42,500 line of credit that charges an annual percentage rate of prime rate…

A: Calculate the rate of interest per month:

Q: Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days…

A: The term finance charge refers to the cost of borrowed money or the charges that are incurred on the…

Q: Consider a credit card with an APR of 21.99% and a minimum payment each month of 6% of the new…

A: Finance Charge = starting balance *21.99%/12

Q: You’re prepared to make monthly payments of $265, beginning at the end of this month, into an…

A: Monthly payment (P) = $ 265 Future value (FV) = $ 68000 Annual interest rate =9% Monthly interest…

Q: The balance on a credit card, that charges a 20% APR interest rate, over a 1 month period is given…

A: Average daily balance is the average of the monthly expenses Date No of days Balance…

Q: Assume that you start with a balance of $3900 on your credit card. During the first month you charge…

A: Given, Starting balance is $3900. First month charge is $400. Second month charge is $650 Rate of…

Q: Your office supply has a line of credit that charges an annual percentage rate of prime rate plus…

A: Given information: Balance of office supply line of credit on different dates of March. Annual…

Q: The balance on a credit card, that charges a 20% APR interest rate, over a 1 month period is given…

A: Credit card is a facility provided by the credit card companies to its customers in which customer…

Q: An account starts with a value of $5,500. It earns 7.4%, compounded monthly. $300 is added to the…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Q: Suppose you deposit D dollars at the beginning of each month into an account that pays a monthly…

A: Given: B = $2,600 D = $160 r = 0.005 B = D(1+r)[ (1+r)t -1]/r.

Q: Your credit card has a limit of $3,000. You have charged goods totaling that amount. Your yearly APR…

A: Finance charges of 1 month = Credit limit availed * APR % * 1 month / 12 months

Q: Suppose you have a revolving credit account at an annual percentage rate of 12%, and your previous…

A: Cash and cash equivalents mean the cash or the assets which can be converted into cash within a very…

Q: A credit card has a 21.99% APR, a minimum monthly payment of 3.15%, and a current monthly statement…

A: Minimum monthly payment is the least amount of money paid by the credit card holder every month .…

Q: The balance on a credit card, that charges a 12% APR interest rate, over a 1 month period is given…

A: A credit card refers to a facility provided by banks to its customers that customers can make the…

Q: You have a credit card that has a balance of $11,020 at an APR of 20.49 %.You plan to pay $400 each…

A: The number of months required to pay off the balance can be computed with the help of NPER function…

Q: Assume that you have a balance of $5500 on your Discover credit card and that you make no more…

A: The annual percentage rate that is APR refers to the interest rate on the credit card. The interest…

Q: Assume that you have a balance of $3000 on your Discover credit card and that you make no more…

A: Formula:

Q: Jerry Allison starts the month with a balance on his credit card of $1,180. On the 10" day of the…

A: In Previous Balance Method, Unpaid Balance at start of billing cycle is used to compute finance…

Q: Assume that you have a balance of $3400 on your credit card and that you make no more charges.…

A: Credit card is a source to borrow the money from banks or other institutions and this borrowed…

Concept explainers

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.

Question

1.) You have a credit card with an APR of 24%. You begin with a
balance of $620. In the first month you make a payment of $450 and
make new charges of $220. In the second month you make a paymen
of $320 and make new charges of $90. Complete the following table.
(Round VOur anSwers to tho nonrogt

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!

SEE SOLUTION Check out a sample Q&A here

Step 1: INTRODUCTION

VIEW

Step 2: SOLUTION

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383
Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from the bank in the amount of $310,000. The terms of the loan are 6.5% annual interest rate, payable in three months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on February 24, and the entry for payment of the short-term note and final interest payment on April 24. Round to the nearest cent if required.
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase, and 5% in the second month following the purchase. What are the cash payments if it made the following purchases in 2018?
Ancient Grains Unlimited has an accounts receivable turnover ratio of 3.34 times. The net credit sales for the year are $567,920. What is the days sales in receivables ratio for 2018 (rounded to the nearest whole number)? A. 190 days B. 109 days C. 110 days D. 101 days
Millennial Manufacturing has net credit sales for 2018 in the amount of $1,433,630, beginning accounts receivable balance of $585,900, and an ending accounts receivable balance of $621,450. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2018 (round answers to two decimal places). What do the outcomes tell a potential investor about Millennial Manufacturing if industry average is 2.6 times and number of days sales ratio is 180 days?
Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.
Now assume that it is several years later. The brothers are concerned about the firm’s current credit terms of net 30, which means that contractors buying building products from the firm are not offered a discount and are supposed to pay the full amount in 30 days. Gross sales are now running $1,000,000 a year, and 80% (by dollar volume) of the firm’s paying customers generally pay the full amount on Day 30; the other 20% pay, on average, on Day 40. Of the firm’s gross sales, 2% ends up as bad-debt losses. The brothers are now considering a change in the firm’s credit policy. The change would entail: (1) changing the credit terms to 2/10, net 20, (2) employing stricter credit standards before granting credit, and (3) enforcing collections with greater vigor than in the past. Thus, cash customers and those paying within 10 days would receive a 2% discount, but all others would have to pay the full amount after only 20 days. The brothers believe the discount would both attract additional customers and encourage some existing customers to purchase more from the firm—after all, the discount amounts to a price reduction. Of course, these customers would take the discount and hence would pay in only 10 days. The net expected result is for sales to increase to $1,100,000; for 60% of the paying customers to take the discount and pay on the 10th day; for 30% to pay the full amount on Day 20; for 10% to pay late on Day 30; and for bad-debt losses to fall from 2% to 1% of gross sales. The firm’s operating cost ratio will remain unchanged at 75%, and its cost of carrying receivables will remain unchanged at 12%. To begin the analysis, describe the four variables that make up a firm’s credit policy and explain how each of them affects sales and collections.
Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at the end of the month for 12 months. The interest rate is 12% annually. If the monthly payments are $888.49, what is the journal entry to record the cash received on Jan. 1 and the first payment made on Jan. 31?
Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts receivable balance of $844,260, and an ending accounts receivable balance of $604,930. Compute the accounts receivable turnover ratio and the number of days sales in receivables ratio for 2019 (round answers to two decimal places). What do the outcomes tell a potential investor about Starlight Enterprises if the industry average is 1.5 times and the number of days sales ratio is 175 days?
Assume that you start with a balance of $3900 on your credit card.During the first month you charge $400. During the second month you charge $650 and make a payment of $280. Assume that your credit card charges a 29% APR and each month you make the minimum payment of 2.5% of the balance. Complete the following table. Round your answer to the nearest cent. Month 1 Previous balance- $3900 Finance charge- $94.25 Purchase- 400 Payment ?97.50 New balance? Month 2 Previous balance- finance charge- purchase- payments- New balance
Suppose you deposit D dollars at the beginning of each month into an account that pays a monthly rate of r as a decimal. Then, the balance B of the account after t months is given by B = D(1 + r) (1 + r)t − 1 r dollars. Suppose you deposit $160 at the beginning of each month into an account that pays a monthly rate of r = 0.005, which corresponds to an APR of 6%. How long does it take for the account balance to build to $2600? Report your answer to the nearest whole month. months