A store will give you a 4.00% discount on the cost of your purchase if you pay cash today. Otherwise, you will be billed the full price with payment due in 1 month. What is the implicit borrowing rate (effective annual rate) being paid by customers who choose to defer payment for the month?

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

A: We need to use previous balance method to calculate monthly finance charge. Finance Charge using…

Q: A store will give you a 4.00% discount on the cost of your purchase if you pay cash today.…

A: Given information : Discount rate = 4% Time period for payment due = 1 month  Purchase price…

Q: A store will give you a 4.50% discount on the cost of your purchase if you pay cash today.…

A: The implicit rate of borrowing is the cost paid in the terms of discount by the customer if the…

Q: A store will give you a 3% discount on the cost of your purchase if you pay cash today. Otherwise,…

A: Customers who choose to defer payment for the month will be letting go of the discount that they…

Q: You have credit card debt of $25,000 that has an APR (monthly compounding) of 18%. Each month you…

A: The Annual Percentage rate (APR) is the percentage rate that shows the interest rate calculates on…

Q: A merchant buys a bill of goods requiring the payment of $1,500 at the end of 180 days. He is…

A: Cash management involves decision regarding whether, to make early payments to the suppliers and…

Q: Your company has been offered credit terms on its purchases of 4/30, net 90 days. What will be the…

A: The an agreement to purchase products and/or services on credit rather than making immediate cash or…

Q: In ‘N Out Payday Loans advertises that for a fee of only $10, you can immediately borrow up to $200…

A: Calculation of nominal interest rate per month =Amount of fees / Amount of borrowings = 10/200 =0.05…

Q: Recently, you made multiple large purchases on your credit card totaling $16,575. The interest rate…

A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

Q: If your Visa credit card has an APR of 14.49%, compounded monthly and your current balance is…

A: APR is 14.49% Compounded monthly Current Balance is $425.69 Time period 1 year Minimum monthly…

Q: A department store charges 1.5% interest per month, compounded continuously, on its customers’…

A: The real interest that an investor earns on the investment and a borrower pays on loan after…

Q: A supplier is offering your firm a cash discount of 2 percent if purchases are paid for within ten…

A: We will have to compute the effective rate of cash discount being offered by the supplier.

Q: A payday loan company charges a $60 fee for a $450 payday loan that will be repaid in 10 days.…

A: Equivalent annual interest rate = fees changes/(Loan amount*number of days of loan/365)

Q: A payday loan company charges a $25 fee for a $550 payday loan that will be repaid in 14 days using…

A: Interest Amount = Principal * Rate * Time

Q: What is the implicit borrowing rate being paid by customers who choose to defer payment for the…

A: Information Provided: Discount rate = 4.75% Amount due (time) = In 1 month

Q: A payday loan company charges you 3% interest to borrow money for just two weeks. What is the…

A: Payday loan is a very-short period finance, generally for few weeks which is provided to salaried…

Q: Big Dom’s Pawn Shop charges an interest rate of 20 percent per month on loans to its customers. Like…

A: APR = given monthly rate * 12 months

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: A store will give you a 4.00% discount on the cost of your purchase if you pay cash today.…

A: Cash Discount is the discount provided by the sellers to encourage buyers to make payment of their…

Q: A payday loan company charges a $85 fee for a $500 payday loan that will be repaid in 14 days.…

A: Payday loan is a type of short term borrowing. This loan is based on the income of the borrower and…

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

A: A credit card is a pay later facility provided by the banks to its customers. Banks charge interest…

Q: Recently, you made multiple large purchases on your credit card totaling $10,350. The interest rate…

A: Formulas:

Q: A supplier will give Shark Unibase Company a discount of 2% if an invoice is paid 60 days before its…

A: The credit policy of the supplier allows the company to avail a discount of 2% if the invoice is…

Q: You have an account with a $1000 credit limit that charges 12.25% interest using the average daily…

A: In credit cards they are charged based on the daily balance and there is need of daily balance and…

Q: %, collections within the discount period is 40% and the average age will be 22 days. The variable…

A: The costs decline significantly with experience due to the learning curve phenomenon and efficiency.…

Q: What will be the simple commercial discount that would have a document whose face value is $ 7,200…

A: The formula to calculate Simple Discount is  SD=Mrt where  SD= Simple discount M= face value r=Rate…

Q: A store will give you a 1.75% discount on the cost of your purchase if you pay cash today.…

A: The concept of the time value of money states that the same amount of money is worth more today than…

Q: A store will give you a 2.75% discount on the cost of your purchase if you pay cash today.…

A: Given: Discount rate is 2.75%

Q: What is the approximate amount of each payments that Yumati will need to​ make?

A: Here is the calculation for the above question.

Q: An automobile dealership offers a car with $0 down payment, $0 first month's payment, and $0 due at…

A: The negotiated sales price is the present value of future payments. It is the discounted value of…

Q: Assume you have a balance of $1200 on a credit card with an APR of 24%, or 2% per month. You start…

A:

Q: Big Dom's Pawn Shop charges an interest rate of 25.5 percent per month on loans to its customers.…

A: APR refers to the annual percentage return it is calculated by multiplying the periodic rate to the…

Q: A store will give you a 5.00% discount on the cost of your purchase if you pay cash today.…

A: Calculation of the implicit borrowing rate being paid by customers: Let's assume that the cost of…

Q: Dome Metals has credit sales of $522.000 yearly If Dome offers a 2 percent discount for payment in…

A: Accounts receivables of a company are the receivables which a company will receive from the…

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: The bank is offering you 9 APR on a loan. Currently the conditions are that the 9 APR is compounded…

A: Annual Percentage Rate = 9% Monthly Compounding Number of compounding periods = 12

Q: to determine the regular payment amount, rounded to the nearest dollar. Your credit card has a…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: You have credit card debt of $25,000 that has an APR (monthly compounding) of 18%. Each month you…

A: APR of old card = 18% APR of New Card = 9% Number of months in year = 12   (i) Monthly Interest rate…

Q: A payday loan company charges you 4% interest to borrow money for just two weeks. What is the…

A: Equivalent annual rate is the real rate of return that is obtained on an investment. It is…

Q: A store will give you a  3.75% discount on the cost of your purchase if you pay cash today.…

A: Monthly rate is calculated below:

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

A: Case : As the question provides that the payment receive and record would take time of 10 days .…

Q: A merchant buys a bill of goods requiring the payment of 1500php at the end of 180 days. He is…

A: Rate of discount=5%Purchase price=1500

Q: The annual interest rate on a credit card is 16.99%. If a payment of $400.00 is made each month, how…

A: Credit Card is short-term debt instrument which allows cardholder to make credit purchases and make…

Q: You have a credit card with an APR (Annual Percentage Rate) of 12%. You begin with a balance of…

A: APR = 12%  Beginning Balance = $200 Payment = $75 1st month charge = $50 2nd month charge = $60