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A homeowner planning a kitchen remodeling can afford a $300 monthly payment. How much can the homeowner borrow for 2 years at 9%, compounded monthly, and still stay within the budget? (Round your answer to the nearest cent.)
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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.A homeowner planning a kitchen remodeling can afford a $300 monthly payment. How much can the homeowner borrow for 3 years at 9%, compounded monthly, and still stay within the budget? (Round your answer to the nearest cent.)A homeowner planning a kitchen remodeling can afford a $500 monthly payment. How much can the homeowner borrow for 4years at 3%, compounded monthly, and still stay within the budget? (Round your answer to the nearest cent.) $
- A couple purchasing a home budget $1400 per month for their loan payment. If they have $25,000 available for a down payment and are considering a 25 year loan, how much can they spent on the home at the following rate 7.1% compounded monthly? ______A couple purchasing a home budget $1800 per month for their loan payment. If they have $16,000 available for a down payment and are considering a 25-year loan, how much can they spend on the home at each of the following rates? (Round your answers to the nearest cent.) (a) 6.3% compounded monthly(b) 7.1% compounded monthlyA couple purchasing a home budget $1,800 per month for their loan payment. If they have $25,000 available for a down payment and are considering a 25-year loan, how much can they spend on the home at each of the following rates? (Round your answers to the nearest cent.) 1) 6.3% compounded monthly 2) 7.2% compounded monthly
- 1. A homeowner planning a kitchen remodeling can afford a $200 monthly payment. How much can the homeowner borrow for 5 years at 3%, compounded monthly, and still stay within the budget? (Round your answer to the nearest cent.) 2. John Fare purchased $12,000 worth of equipment by making a $2000 down payment and promising to pay the remainder of the cost in semiannual payments over the next 3 years. The interest rate on the debt is 8%, compounded semiannually. Find the following. (Round your answers to the nearest cent.) (a) the size of each payment$ (b) the total amount paid over the life of the loan$ (c) the total interest paid over the life of the loan$ 3. A recent graduate's student loans total $13,000. If these loans are at 5%, compounded quarterly, for 6 years, what are the quarterly payments? (Round your answer to the nearest cent.) 4. The problem describes a debt to be amortized. (Round your answers to the nearest cent.)A man buys a house for $300,000. He makes a…After carefully going over your budget, you have determined you can afford to pay $854 per monthtoward a new car. You call up your local bank and find out that the going rate is 1% per month for 48 months.How much can you borrow?Rudy Anne wants to buy new farm equipment costing P350,000 making a down payment of P50,000. The remainder is to be paid at the end of each month for five years at 15% compounded monthly. Find the amount needed for monthly payments.
- You are considering the purchase of new living room furniture that costs $1,390. The store will allow you to make WEEKLY payments of $29.00 for one year to pay off the loan. What is the EAR of this arrangement? (There are 52 weeks in a year.) (x.xx) (Don't handwriting)The manger of a technology store wants to save $40,000 in 3 years to make a down payment on a condominium. How much (in dollars) does the manager need to invest at the beginning of each week into an account that earns 9.75% interest compounded weekly? Round your answer to the nearest cent.)Blush Inc., sold a kitchen appliance that costs $1,000.00 with 5-year financing to a customer who made a down payment of $510.00. What should be the size of the loan payments at the end of every month if interest of 9.00% compounded monthly is charged? You plan to save money for a down payment of $39,000 to purchase an apartment. You can only afford to save $6,000 at the end of every 6 months into an account that earns interest at 4.25% compounded monthly. How long will it take you to save the planned amount?
