Boatler Used Cadillac Co. requires $810,000 in financing over the next two years. The firm can borrow the funds for two years at 7 percent interest per year. Mr. Boatler decides to do forecasting and predicts that if he utilizes short-term financing instead, he will pay 5.25 percent interest in the first year and 9.55 percent interest in the second year. Assume interest is paid in full at the end of each year. a. Determine the total two-year interest cost under each plan. b. Which plan is less costly? Short-term variable-rate plan or Long-term fixed-rate plan?
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- Boatler Used Cadillac Co. requires $870,000 in financing over the next two years. The firm can borrow the funds for two years at 9 percent interest per year. Ms. Boatler decides to do forecasting and predicts that if she utilizes short-term financing instead, she will pay 5.75 percent interest in the first year and 10.55 percent interest in the second year. Assume interest is paid in full at the end of each year. a. Determine the total two-year interest cost under each plan. Long-term fixed-rate Short-term variable-rate b. Which plan is less costly? Interest Cost O Short-term variable-rate plan O Long-term fixed-rate planBoatler Used Cadillac Company requires $980,000 in financing over the next two years. The firm can borrow the funds for two years at 10 percent interest per year. Ms. Boatler decides to do forecasting and predicts that if she utilizes short-term financing instead, she will pay 6.75 percent interest in the first year and 11.55 percent interest in the second year. Assume interest is paid in full at the end of each year. Determine the total two-year interest cost under each plan. Which plan is less costly? multiple choice Short-term variable-rate plan Long-term fixed-rate planBoatler Used Cadillac Co. requires $850,000 in financing over the next two years. The firm can borrow the funds for two years at 12 percent interest per year. Ms. Boatler decides to do forecasting and predicts that if she utilizes short-term financing instead, she will pay 7.75 percent interest in the first year and 13.55 percent interest in the second year. Assume interest is paid in full at the end of each year. What is the short term variable rate?
- Boatler Used Cadillac Co. requires $800,000 in financing over the next two years. The firm can borrow the funds for two years at 9 per cent interest per year. Mr Boatler decides to do forecasting and predicts that if he utilizes short-term financing instead, he will pay 6.75 per cent interest in the first year and 10.55 per cent interest in the second year. a. Determine the total two-year interest cost under each planSmith borrows 21,500 to purchase a new car. The car dealer finances the purchase with a loan that will require level monthly payments at the end of each month for 4 years, starting at the end of the month in which the car is purchased (assume the car is purchased on the 1st of the month). The loan has 0% interst rate for the first year followed by 7% annual nominal interest rate, compounded monthly, for the following three years. Find the outstanding balance on the loan at the end of the first year.The Clarke family is buying a home and will select a mortgage with a 25-year amortization period, at a rate of 6% compounded semiannually for a 5-year term. The monthly mortgage payment will be their only debt payment. The family’s gross monthly income is $8,400. Property taxes are estimated at $500 per month, and heating costs at $375 per month. The bank has upper limits of 39% for GDS and 44% for TDS. What is the maximum mortgage for which the Clarkes qualify?
- Killion Company needs to purchase new equipment, but does not have enough cash to purchase it outright. Therefore, on 1/1/21, Killion finances the purchase of the equipment by borrowing $29,000 on a 4-year, 5% installment loan. The loan specifies that Killion needs to make 4 payments of $8,178 once a year for the next four years. Each installment payment goes towards both accrued interest and the principal on the loan. Each installment payment is made on December 31. repare the journal entries for Killion to record the note's issuance and the first installment payment. (Round your intermediate alculations and final answers to the nearest dollar amount.) View transaction list Journal entry worksheet of 33 ― Next >George Green wishes to invest $8000.00 that he saved from his summer job. His bank offers 3.75% for a one-year term investment or 3.5% for a six-month term. a)How much will George receive (capital plus interest) after one year if he invests at the one-year rate? Round to nearest one. b)How much will he receive (capital plus interest) after one-year if he invests for six months at a time at 3.5% each time? This means George took the interest from the first investment transaction and included it in the principal for the second transaction. Round to nearest 100th. c)What would the one-year rate have to be to yield the same amount of interest when investing for six months at a time at 3.5% each time? Give your answer as a percentage round to nearest 100th .Jordan was supposed to pay Courtney $4,200 6 months ago and $2,220 in 5 months. If he wants to repay this amount with two payments of $3,500 today and the balance amount in 3 months, calculate the balance amount. Assume interest is 2.40% p.a. and the agreed focal date is 3 months from now.
- Miller borrows $370,000 to be paid off in four years. The loan payments are semiannual with the first payment due in six months, and interest is at 8%. What is the amount of each payment? Note: Use tables, Excel, or a financial calculator. Round your final answer to the nearest whole dollar. (FV of $1, PV of $1, FVA of $1, and PVA of $1). Multiple Choice О $62,451 О $118,400 $122,549 О $54,955Donovan took a $46,000 loan at 3.78% compounded monthly and decided to make end of month payments of $1,413. 1) How many payments will Donovan have to make to amortize this loan? (rounded to the next higher whole number) 2) What will the size of his final payment be? (enter a positive value)The Taylors have purchased a $260,000 house. They made an initial down payment of $30,000 and secured a mortgage with interest charged at the rate of 8%/ year on the unpaid balance. Interest computations are made at the end of each month. If the loan is to be amortized over 30 years, what monthly payment will the Taylors be required to make? (Round your answer to the nearest cent.)$ What is their equity (disregarding appreciation) after 5 years? After 10 years? After 20 years? (Round your answers to the nearest cent.) 5 years $ 10 years $ 20 years $