Ray Flagg took out a 60-month fixed installment loan of $12,000 to open a new pet store. He paid no money down and began making monthly payments of $232. Ray's business does better than expected and instead of making his 36th payment, Ray wishes to repay his loan in full. Complete parts a) through c). 6. 2 Click the icon to view the table of interest rates. a) Determine the APR of the installment loan APR= b) How much interest will Ray save by paying off the loan early? (Use the actuarial method) (Round to the nearest cent.) Interest saved $ c) What is the total amount due to pay off the loan? The total amount due $ (Round to the nearest cent.) 2: table of interest rates Annual Percemntage Rate 7.0% 6.0% 5.5% 6.5% 4.5% 5.0% 3.5% 4.0% 3.0% Number of Payments (Finance charge per $100 of amount financed) 7.45 6.91 5.83 6.37 4.75 5.29 4.22 3.69 24 3.15 9.30 8.61 7.26 7.94 5.25 5.92 6.59 4.58 30 3.92 11.16 10.34 9.52 7.09 7.90 8.71 6.29 4.69 5.49 36 13.83 14.94 11.63 12.73 9.46 10.54 7.31 8.38 6.24 48 18.81 14.61 16.00 17.40 11.86 13.23 7.81 10.50 9.15 60

Ray Flagg took out a 60-month fixed installment loan of $12,000 to open a new pet store. He paid no money down and began making monthly payments of $232. Ray's business does better than expected and instead of making his 36th payment, Ray wishes to repay his loan in full. Complete parts a) through c). 6. 2 Click the icon to view the table of interest rates. a) Determine the APR of the installment loan APR= b) How much interest will Ray save by paying off the loan early? (Use the actuarial method) (Round to the nearest cent.) Interest saved $ c) What is the total amount due to pay off the loan? The total amount due $ (Round to the nearest cent.) 2: table of interest rates Annual Percemntage Rate 7.0% 6.0% 5.5% 6.5% 4.5% 5.0% 3.5% 4.0% 3.0% Number of Payments (Finance charge per $100 of amount financed) 7.45 6.91 5.83 6.37 4.75 5.29 4.22 3.69 24 3.15 9.30 8.61 7.26 7.94 5.25 5.92 6.59 4.58 30 3.92 11.16 10.34 9.52 7.09 7.90 8.71 6.29 4.69 5.49 36 13.83 14.94 11.63 12.73 9.46 10.54 7.31 8.38 6.24 48 18.81 14.61 16.00 17.40 11.86 13.23 7.81 10.50 9.15 60

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2P: Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for...

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Dominique Fouque owns and operates Dominiques Doll House. She has a small shop in which she sells new and antique dolls. She is particularly well known for her collection of antique Ken and Barbie dolls. A completed spreadsheet for 20-3 is shown on page 610. Fouque made no additional investments during the year and the long-term note payable is due in 20-9. No portion of the long-term note is due within the next year. Net credit sales for 20-3 were 38,000, and receivables on January 1 were 3,000. REQUIRED 1. Prepare a multiple-step income statement. 2. Prepare a statement of owners equity. 3. Prepare a balance sheet. 4. Compute the following measures of performance and financial condition for 20-3: (a) Current ratio (b) Quick ratio (c) Working capital (d) Return on owners equity (e) Accounts receivable turnover and average number of days required to collect receivables (f) Inventory turnover and the average number of days required to sell inventory 5. Prepare adjusting entries and indicate which should be reversed and why. 6. Open an Income Summary account. Post adjusting and closing entries (prepared in 7) to this account. 7. Prepare closing entries. 8. Prepare reversing entries for the adjustments where appropriate.
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Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?
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