What is the implicit borrowing 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: A local store charges 11/2% each month on the unpaid balance for its charge account. What nominal…

A: Nominal rate is the annual percentage rate for given number of compounding periods. Effective annual…

Q: Kumi Ltd permits its customers to pay with a credit card or to receive a percentage discount x for…

A:

Q: Suppose you open a credit card account and charge $125 to the account on the first of each month to…

A: Fill in the given table: Formulas for the above table:

Q: What is the highest rate, simple interest at which the buyer can afford to borrow money in order to…

A: Highest Simple Rate: The highest simple rate is also known as the break-even rate. It is computed by…

Q: Suppose you owe $1,100 on your credit card. The annual percentage rate (APR) is 18%, compounded…

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

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 washer-dryer combination can be purchased from a department store by making monthly credit card…

A: Given: Particulars Amount Monthly payment $46.34 Years 3.5 Interest rate 21% Additional…

Q: Calculate the monthly finance charge for the credit card transaction. It takes 10 days for a payment…

A: We will calculate the interest on the basis of simple interest.

Q: Assume that you start with a balance of $4000 on your Visa credit card. During the first month, you…

A: Finance charges are levied by credit card companies if credit card holder fails to make payment on…

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

A: Let's assume the cost of purchase is C. On immediate payment,Discount = 4%Hence, the discounted cost…

Q: Round House Furniture offers credit to its customers at a rate of 1.15 percent per month. What is…

A: Effective rate of interest is the equivalent interest rate which is determined by considering the…

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: ur customers has just made a purchase in the amount of $28,000. You have agreed to payments of $590…

A: The time period to pay the loan will depends on the interest rate and compounding of loan and…

Q: Assume that you start with a balance of $3600 on your credit card. During the first month, you…

A: Given Starting balance is $3600 First month charge is $400 Second month charge is $550

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 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: "A furniture store has an ad for a sofa set priced at $1600. The customer is offered the choice of…

A: A loan is an agreement between two parties where one party forwards an amount for it to be paid back…

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

A: Information Provided: Balance = $600 Rate = 18% Payment = $550 Term = 10/30 days

Q: A department store has offered you a credit card that charges interest at 1.75% per month compounded…

A: Computation:

Q: a. How much will you pay each month? How does this compare with the credit-card payment each mont?…

A: Loan amount (P) = $6100 Interest rate (r) = 11.5% n = Payment frequency = 12 (r/n) = 0.95833% t = 6…

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: The balance on a credit card, that charges a 20% APR interest rate, over a 1 month period is given…

A: Average daily balance is the average of the monthly expenses   Date No of days Balance…

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: t purchased new goods worth 100,000 EUR from your supplier. Your supplier offers you to pay within…

A: Supplier provide credit for payment but due to this default on loan occurs but due to this they give…

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: 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: A local store charges 1½% each month on the unpaid balance for its charge account. What nominal…

A: Interest is an additional amount which is received over the deposited amount. At maturity, depositor…

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

A: Minimum monthly payment is the least amount of money paid by the credit card holder every month .…

Q: You just received your Citibank Mastercard bill and you owe $3,078.64. Your minimum payment is $57…

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

Q: A washer-dryer combination can be purchased from a department store by making monthly credit card…

A: Amortized Loan:  Amortized loan is a type of loan in which the borrower would pay periodic payments…

Q: You purchased an appliance in a certain appliance center worth P35,000 using your credit card. The…

A: The question is related to Amortization Schedule for 6 months. The details are given.

Q: Which one of the following statements is correct if you purchase an item with credit terms of 3/15,…

A: The credit terms are the terms of sale for customers who have been extended credit by the firm. Here…

Q: You have an unpaid balance of $250, on your credit card. You stop making additional purchases with…

A: Balance=250Time=10monthsCharge=15%Minimum payments=6%

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

Q: An auto dealership is advertising that a new car with a sticker price of $33,768 is on sale for…

A: To open goal seek, firstly go to Data, followed What-if analysis & then goal seek.

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.