5.When Jose just moved into the town and wanted to set up an internetconnection using AT&T, he was told that the hook up fee is $200. Jose did not havethat much money and wanted to pay for it in the next four months when his part-timejob at the library started. AT&T customer service said that it was fine, but AT&Tdid charge 1% monthly interest rate with monthly compounding. How much will hismonthly installment be in the next four months?

The value of money does not remain constant throughout time since it varies with time, and so this…

Answered: 5. When Jose just moved into the town…

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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You open a new business and need a new laptop computer. You decide on a Knox Computer Solutions for $1499 due to the business software that is included. If the sales tax is 4.25% of the purchase price and you finance the total cost, including sales tax, for 3 years at the annual interest rate of 8.4%, find the monthly payment amount.
Joe just graduated from college and has found a nice job. As a graduation gift his father gave him &5,000 as seed money for a down payment for a condominium that Joe plans to purchase in three years. Joe wants to invest his $5,000 into a savings account that gives him the best rate. Bank A has an interest rate of 6.02% compounded quarterly. Bank B has an interest rate of 6% compounded monthly. Which bank's savings account should Joe go with so that he can earn the most money at the end of the three years?
A friend of yours just bought a new sports car with a $5,000 down payment,and her $30,000 car loan is financed at an interest rate of 0.75% per month for 48 months. After two years, the “Blue Book” value of her vehicle in the used-car marketplace is $15,000. Solve, a. How much does your friend still owe on the car loan immediately after she makes her 24th payment? b. Compare your answer to Part (a) to $15,000. This situation is called being “upside down.” What can she do about it? Discuss your idea(s) with your instructor.
14. Nadia takes out a loan of $150,000 to purchase an apartment. The loan is being charged a yearly interest rate of 2.5% applied monthly. Nadia is paying off the loan by making monthly payments of $500.00. (a) How much of Nadia's first payment goes towards paying interest and how much of it goes towards reducing the initial $150,000 loan amount? Show how you found your answers (b) Did Nadia reduce the loan amount she owed more in the first payment or the second payment? Justify.
Like many college students, Diana applied for and got a credit card that has an annual percentage rate (APR) of 15%. The first thing she did was buy a new DVD player for $400. At the end of the month, her credit card statement said she only needed to make a minimum monthly payment of $15. Assume Diana makes her payment when she sees her statement at the end of each month. If Diana doesn't charge anything else and only makes the minimum monthly payments, approximately how many months would it take her to completely pay off the DVD player? Assume that the credit card company compounds interest at the end of each month. O 35.8 months O 37.8 months O 46.3 months O 50.0 months O 32.6 months Diana now realizes she needs to pay more than just the minimum payment (unless she wants to be paying for this DVD player until she graduates). She decides to pay twice the minimum monthly payment ($30 per month), instead. How much quicker will she pay off the DVD player? 19.5 months O 26.4 months O 21.1…
Ernie Bilko has a business idea. He wants to rent an abandoned gas station for just the months of November and December. He will convert the gas station into a drive-through Christmas wrapping station. Customers will drive in, drop off their gifts, return the next day, and pick up their wrapped gifts. He needs $331,700 to rent the gas station, purchase wrapping paper, hire workers, and advertise. If he borrows this amount at 6.5 interest for those two months, what size lump sum payment will he have to make to pay off the loan? (Round your answer to the nearest cent.) $ _______
Your birthday is next week and instead of other presents, your parents promised to give you $1,300 in cash. Since you have a part-time job and, thus, don't need the cash immediately, you decide to invest the money in a bank CD that pays 5.40 percent, compounded quarterly, for the next two years. How much money can you expect to earn in this period of time? (If you solve this problem with algebra round intermediate calculations to 6 decimal places, in all cases round your final answer to the nearest penny) Value of investment after 2 years $
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