17. Bahati Zuri obtained an installment loan for $25,000 so he could be a partner ina new restaurant. Barak Financial is offering a loan with an APR of 9% for 36months and 5% down payment. Niya Credit Union is offering a loan with an APRof 8% for 24 months and 10% down payment. How much does Bahati save bytaking the loan that costs the least? Use the Monthly Payment on a SimpleInterest Installment Loan of $100.

Interest = net loan * 9%* 36/12

Answered: 17. Bahati Zuri obtained an installment…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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2. You purchase a basic package, 4-door sedan for your company's fleet for $18,000. The 3 year loan has an interest rate of 13.75%. You make 10 payments and decide the 11th will be the payment to pay off the loan in its entirety. How much does the 11" payment need to be, using the Actuarial Method?
A friend asks to borrow $55 from you and in return will pay you $58 in one year. Ifyour bank is offering a 6% interest rate on deposits and loans: How much would you have in one year if you deposited the $55 instead? How much money could you borrow today if you pay the bank $58 in one year? Should you loan the money to your friend or deposit it in the bank?
You are offered an add-on loan for $4,500 at 18% for 5 years. What is the monthly payment? What is the amount of interest? What is the true interest rate cost of this loan? If you could pay the same loan above at a compound rate: What would the monthly payment be? What would the amount of interest be? Prepare a monthly payment schedule for each loan above using Excel, and submit it. Suppose that you are only allowed to make a balloon payment to the principal of the compound interest loan. You have $1,000 to put down at the beginning of year three. How many payments will you save?
Number 3: Rajesh would like to buy his first car and the one he has his eye on is $25,000, plus an extra 13% HST for a total price of $28,250. The dealership has a deal for $0 down payment and charges 2.79% interest on the loan. Rajesh plans to make car loan payments weekly and has accepted the maximum loan repayment period of 8 years. Question a. How much will his weekly care loan payment be? b. How much will he have paid to the dealership by the time his loan is paid off? c. How much interest will be paid? Number 4: Hak Young has accumulated some credit card debt while he was in college. His total debt is now $13,864.82 and his credit card charges 19% interest compounded monthly. He is getting worried about his debt and is determined to pay it off completely. Question a. What would Hak Young’s minimum payment have to be in order to pay off his debt in 5 years? b. What will be the total interest paid? Number 5: Hak Young is daunted by that monthly payment amount and is…
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $185,000. Chuck can get a secured add-on interest loan from his bank at 7.35% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,300 per month and amortize the loan in 42 months. (a) Find Chuck's monthly payment (in $) with these conditions. (Round your answer to the nearest cent.) $ 4257.64 × Can he pay off the loan and keep his payments under $4,300? Yes, under these conditions, Chuck will meet his goal. No, the monthly payment is too high. (b) What are Chuck's options to get his payments closer to his goal? (Select all that apply.) □ □ □ □ □ make a lower down payment try to bargain for a lower sale price make a higher down payment try to negotiate a higher interest rate try to bargain for a higher sale price try to negotiate a lower interest rate
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $175,000. Chuck can get a secured add-on interest loan from his bank at 7.45% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $4,100 per month and amortize the loan in 42 months. 1) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.95% loan if Chuck can pay 20% down. What will Chuck's new monthly payment (in $) be with these conditions? (Round your answer to the nearest cent.) $ With these conditions, will Chuck be able to pay off the loan and meet his goals? Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high. 2) Attempting to reduce his monthly payment further, Chuck continues to negotiate with the seller. If the seller agrees to reduce the listed price by $4,800, finance the deal with a 6.95% loan, and if Chuck pays the 20% down, what will Chuck's monthly payment be (in $)?…
A few years down the road you have moved out, buying your own home. You decide to take another look at your finances. Your outstanding loan of $275 per month only has 8 payments left on it (out of the original 60) with an interest rate of 11.75%. a. What is the finance charge “f”? b. What is the unearned interest “u”? c. How much would it cost to pay it off on payment #53?
W Phillamone Berry has a car loan with a company that refunds interest using the rule of 78 when loans are paid in full ahead of schedule. He is using an employee bonus to pay off his car, which is on a 40-month loan. The total interest for the loan is $2,337, and he has 12 more payments to make. How much finance charge will he get credit for if he pays the loan in full immediately? $ (Round to the nearest cent as needed.)
You are buying a house and will borrow $325,000 on a 25-year fixed rate mortgage with monthly payments to finance the purchase. Your loan officer has offered you a mortgage with an APR of 4.10 percent. Alternatively, she tells you that you can "buy down" the interest rate to 3.75 percent if you pay points up front on the loan. A point on a loan is 1 percent (one percentage point) of the loan value. How many points, at most, would you be willing to pay to buy down the interest rate? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.
Chuck Wells is planning to buy a Winnebago motor home. The listed price is $145,000. Chuck can get a secured add-on interest loan from his bank at 7.45% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $3,400 per month and amortize the loan in 42 months. (a) Find Chuck's monthly payment (in $) with these conditions. (Round your answer to the nearest cent.) $ Can he pay off the loan and keep his payments under $3,400? Yes, under these conditions, Chuck will meet his goal.No, the monthly payment is too high. (b) What are Chuck's options to get his payments closer to his goal? (Select all that apply.) try to bargain for a lower sale price make a higher down payment make a lower down payment try to bargain for a higher sale price try to negotiate a higher interest rate try to negotiate a lower interest rate (c) Chuck spoke with his bank's loan officer, who has agreed to finance the deal with a 6.85% loan if Chuck can pay 20% down.…
Kevan needed a loan for $8500 and was offered an interest rate of 6.2% compounding weekly. Kevan decided to make monthly payments instead of paying off the loan all at once. Why would this be financially beneficial for Kevan to pay off the loan in monthly payments?
A student needs to borrow $9,000 to pay for college. She can get the loan at an APR of 10% to be paid off in monthly installments over the next 4 years. If she decides to pay the loan off in monthly installments over 3 years instead of 4 years at the given APR, how much money will she save altogether? Round your answer to the nearest cent.) 62.14

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