a. Compute total dollar interest payments for the six months. To convert an annual rate to a monthly rate, divide by 12. (Round intermediate calculations and final answers to 2 decimal places.) Total dollar interest payments $427.92 b-1. Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six months. Assume a long-term rate is locked in on an interest-only loan. Total dollar interest payments $

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Liz's Health Food Store has estimated monthly financing requirements for the next six months as follows:
January
February
March
$9,500 April
3,500
4,500
January
February
March
May
June
Short-term financing will be utilized for the next six months. Projected annual interest rates are:
9.0% April
10.0% May
13.0% June
$9,500
10,500
5,500
15.0%
12.0%
12.0%
a. Compute total dollar interest payments for the six months. To convert an annual rate to a monthly rate, divide by 12. (Round
intermediate calculations and final answers to 2 decimal places.)
Total dollar interest payments
$427.92
b-1. Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six months.
Assume a long-term rate is locked in on an interest-only loan.
Total dollar interest payments
$
Transcribed Image Text:Liz's Health Food Store has estimated monthly financing requirements for the next six months as follows: January February March $9,500 April 3,500 4,500 January February March May June Short-term financing will be utilized for the next six months. Projected annual interest rates are: 9.0% April 10.0% May 13.0% June $9,500 10,500 5,500 15.0% 12.0% 12.0% a. Compute total dollar interest payments for the six months. To convert an annual rate to a monthly rate, divide by 12. (Round intermediate calculations and final answers to 2 decimal places.) Total dollar interest payments $427.92 b-1. Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six months. Assume a long-term rate is locked in on an interest-only loan. Total dollar interest payments $
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