*A TV costing £800 pounds is paid by equal payments made at the end of the week for three years. Assume that there are 52 weeks in a year. The shop uses an interest rate of 29.9% per year. (a) Compute the weekly payment. (b) For the first payment, compute how much is used to pay interest and how much to pay off the loan. (c) You should have found that the interest component of the first payment is larger than the component used to pay off the loan. Which is the first payment where the interest component is smaller than the component used to pay off the loan?
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- 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.1. A business loan is amortized constantly through 35 monthly rents, if the first rent is L 8,850 and the rate is 18% compounded by months. What is the value of the credit if before starting the 35 constant amortization rents you make 10 payments of L 5,000.00. Make the amortization table in its first 10 lines and the last 5. How much is the total interest generated?. do the exercise in excel1.) If $25,000 is deposited in an account that earns interest compounded monthly becomes $32,000 after 2 years, what is the interest rate? 2.) A sala set is offered for sale for $50,000 down payment and $1,500 every 3 months for the balance for 24 months. If interest is to be computed at 4% compounded quarterly, what is the cash price equivalent of the sala set? 3.) Jessa Mae wants to have $50,000 at the end of 4 years for her graduation expenses and blow out party. She plans to deposit a certain amount, at the end of each month to achieve this goal. If her deposit pays 8% compounded monthly, what should be her monthly deposit?
- 1. A loan of $14,400 is to be repaid in end-of-the-quarter payments of $600. How many payments are required to repay the loan at 10.5% compounded quarterly? 2. Scheduled payments of $1,010 due five months ago and $1,280 due today are to be repaid by a payment of $615 in four months and the balance in seven months. If money is worth 7.75% p.a. and the focal date is in seven months, what is the amount of the final payment?7. You owe your best friend $2,700. Because you are short on cash, you offer to repay the loan over 11 months under the following condition. The first payment will be $100 at the end of month one. The second payment will be $100+G at the end of month two. At the end of month three, you'll repay $100+2G. This pattern of increasing G amounts will continue for all remaining months. a. What is the value of G if the interest rate is 0.75% per month? b. What is the equivalent uniform monthly payment? c. Repeat Part (a) when the first payment is $130 (i.e., determine G). Please show all work and attempt to be correct please.A construction company takes a loan of $535,000 to cover the cost of a new grader. If the interest rate is 6.7% APR, and payments are made monthly for fiveyears, what percentage of the outstanding principal does the company pay in interest each month? A. 0.66% B. 5.58% C. 0.51% D. 0.61% E. 0.56%
- Suppose you deposited $41,000 in a bank account that pays 5.75% with daily compounding based on a 360-day year. How much would be in the account after 8 months, assuming each month has 30 days? a. $42,598.28 b. $42,571.67 c. $43,426.30 d. $42,793.66 e. $42,602.05Your company borrows $500,000 from a bank to finance the purchase of a new machine. The nominal annual Interest rate Is 8%. The loan is to be fully amortized over 2 years, with equal payments made at the end of each 6-month perlod. 1. What will be the total amount of loan principal repald during the entire first year? 2. What will be the total amount of Interest pald during the entire second year? (Note: For each question, please show detalled explanations as to how you proceed to your answer along with detailed calculations).A) Merchandise is received for $25,000 now and $50,000 in 6 months. If $10,000 is paid within a month, what will be your balance to be paid in the third month if we consider an interest rate of 18% annual compounded monthly? Consider the third month as the focal date. R $ $ 63 655.56 B) A merchant acquires articles for his business for a value of $8,600 paying 30% in cash and the rest with direct financing from the supplier; Two months later he makes a payment of $2,000, agreeing to pay off the debt with a final payment after 6 months. Find the value of the final payment considering that the money is financed at 7%. R $ 4.184,03
- A firm has two simple loans : 150,000 €, due in 1.5 years, 8% p.a. compounded quarterly; 80,000 €, due in 3 years, 11% p.a. simple. Bank agrees on a replacement of those payments by one payment of 50,000 € in six months and the final payment in a year from now. What is the amount of the final payment in a year from now if the current rate is 10%?Assume you have secured a loan of $10,000 from a bank which will be paid in one year. The fin bank has offered you $850 monthly installments, which equates to a 3.67% annualized interest rate. The monthly interest rate of 0.31% is the annual rate divided by 12. You know that the interest is paid at the end of the period, so you can multiply the opening balance by the monthly interest rate to get the interest paid. What is the opening balance for the month of June? Month Payment Interest Principal Opening Balance Closing Balance January $850.00 $10,000.00 February $850.00 March $850.00 April $850.00 May $850.00 June $850.00 July $850.00 August $850.00 September $850.00 October $850.00 November $850.00 December $850.00 Monthly Rate 0.31% Annual Rate 3.67% Total Interest Paid Group of answer choices 6,002.10…To finance the development of a new product, a company borrowed $29000 at 4% compounded monthly. If the loan is to be repaid in equal annually payments over nine years and the first payment is due one year after the date of the loan , what is the size of the annual payment?