Mr. So borrowed Php200,000 from a cooperative that charges 15% yearly. He used the loan to start his food stand siness. How much will he pay for the loan after 18 months?
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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.Mr. So borrowed Php200,000 from a cooperative that charges 15% yearly. He used the loan to start his food stand business. How much will he pay for the loan after 18 months?Kiki bought a computer for Rp. 8,000,000, -. If he bought itWith credit, he must prepare advance money and be able to pay the rest byInstallments every month for 9 months with 24% interest. If he wants biginstallments per month are exactly Rp. 800,000, - according to his income, how much advance money that he must prepare.
- Today, Engr Santos borrowed Php 250,000 to purchase furniture for her new office. She can repay the loan in five equal annual installments with interest based on 5% per year. How much is the annual installment starting next year?Big Sean is buying a new truck from Willie’s Auto Sales, the dealer is providing the financing and he uses the discount method. If borrows $40,000 at 9% for 48 months, how much is his monthly payment?Joshua borrows 35,000 pesos from a cooperative to buy a laptop. He will repay the loan in equal monthly payments over 2 years at the end of each month. If he is charged 10% interest compounded monthly, how much is his monthly payment? What is the total amount that he repays?
- Michael borrowed RM420,000 to buy an apartment in Damansara. His loan cost was 6% and he promised to repay the loan in 30 equal annual payments. How much is the principal outstanding after the first loan payment?1. Pau’s company borrows Php 500,000 from the local bank to invest in a personal computer for the quality control department on the term that the company will pay back Php 120,000 each year for the next 5 years. The first payment is due on the first loan anniversary. What interest rate the bank is charging if compounding is annual?Darwin is a young entrepreneur trying to keep his business afloat. He has missed two payments to acreditor. The first was for $3,485 seven months ago, and the second was for $5,320 last month.Darwin has had discussions with his creditor, who is willing to accept $4,000 one month from now and asecond payment in full six months from now.If the agreed upon interest rate is 7.35% compounded monthly, what is the amount of the secondpayment?
- Imelda took a loan of Php 950,000 from a financial institution to purchase a TV. If the company charges compound interest at 12% per annum during the first year and 12½% per annum during the second year, how much will she have to pay after 5 years?In order to start a small business, Samy borrowed RM40, 000 from a bank. The loan is repaid by monthly installment for five years. The interest charged is 5% on the original balance. (a) Determine the monthly payment. (b) Immediately after paying for three years and six months, he decided to pay off the loan. Using the Rule of 78, calculate the amount he has to pay.You need Php 80,000 per year for four years to go to college. Your father invested Php 100,000 in a 7% csa account for your education when you were born. If you withdraw the Php 80,000 at the end of your 17th, 18th, 19th and 20th year, how much money will be left in the account at the end of your 21st year?
