6: Answer both questions Your credit card has a balance of $3700 and an annual interest rate of 13%. You decide to pay off the balance overtwo years. If there are no further purchases charged to the card, you must pay $175.95 each month, and you will paya total interest of $522.80. Assume you decide to pay off the balance over one year rather than two. How much moremust you pay each month and how much less will you pay in total interest?Use PMT=An1-(1+-)P- ntto determine the regular payment amount.You will pay $ more each month.(Round to the nearest cent as needed.)# ૯૦hpW81°F AC Your credit card has a balance of $3700 and an annual interest rate of 13%. You decide to pay off the balance overtwo years. If there are no further purchases charged to the card, you must pay $175.95 each month, and you will paya total interest of $522.80. Assume you decide to pay off the balance over one year rather than two. How much moremust you pay each month and how much less will you pay in total interest?Use PMT=PA1-(1+)a-ntto determine the regular payment amount.You will pay $ more each month.(Round to the nearest cent as needed.)E-CO81°FAC

Given: Loan amount $3,700 Interest rate = 13% Years =1

Your credit card has a balance of $3700 and an annual interest rate of 13%. You decide to pay off the balance over two years. If there are no further purchases charged to the card, you must pay $175.95 each month, and you will pay a total interest of $522.80. Assume you decide to pay off the balance over one year rather than two. How much more must you pay each month and how much less will you pay in total interest? PA Use PMT= 1 -nt to determine the regular payment amount.

Your credit card has a balance of $3700 and an annual interest rate of 13%. You decide to pay off the balance over two years. If there are no further purchases charged to the card, you must pay $175.95 each month, and you will pay a total interest of $522.80. Assume you decide to pay off the balance over one year rather than two. How much more must you pay each month and how much less will you pay in total interest? PA Use PMT= 1 -nt to determine the regular payment amount.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...

See similar textbooks

Similar questions

You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
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)?
Del Hawley, owner of Hawleys Hardware, is negotiating with First City Bank for a 1-year loan of 50,000. First City has offered Hawley the alternatives listed here. Calculate the effective annual interest rate for each alternative. Which alternative has the lowest effective annual interest rate? a. A 12% annual rate on a simple interest loan, with no compensating balance required and interest due at the end of the year b. A 9% annual rate on a simple interest loan, with a 20% compensating balance required and interest due at the end of the year c. An 8.75% annual rate on a discounted loan, with a 15% compensating balance d. Interest figured as 8% of the 50,000 amount, payable at the end of the year, but with the loan amount repayable in monthly installments during the year