A van is purchased with a down payment of 25%, a payment after 3 months corresponding to 35% of the price, and another payment 5 months after the previous one for $185,000. Assuming interest of 15.6% simple annual interest, determine: (a) The cash price of the vehicle. (b) The size of the 3-month payment. (c) The cost of not paying cash, i.e. interest.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
A van is purchased with a down payment of 25%, a payment after 3 months corresponding to 35% of the price, and another payment 5 months after the previous one for $185,000. Assuming interest of 15.6% simple annual interest, determine:
(a) The cash price of the vehicle.
(b) The size of the 3-month payment.
(c) The cost of not paying cash, i.e. interest.
It is advisable to make a time diagram
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