Carmen's Beauty Salon has estimated monthly financing requirements for the next six months as follows: $ 9,500 April January February 3,500 $ 9,500 10,500 5,500 March 4,500 Short-term financing will be utilized for the next six months. Projected annual interest rates are: January 9.0% April February 10.0% May March 13.0% June Total dollar interest payments a. Compute total dollar interest payments for the six months. Note: Round your monthly Interest rate to 2 decimal places when expressed as a percent. Round your Interest payments to the nearest whole cent. May June 16.0% 12.0% 12.0% b-1. Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six months? Total dollar interest payments Note: Round your monthly Interest rate to 2 decimal places when expressed as a percent. Round your Interest payments to the nearest whole cent. Smaller O Larger b-2. If long-term financing at 12 percent had been utilized throughout the six months, would the total-dollar Interest payments be larger or smaller than with the short-term financing plan?
Carmen's Beauty Salon has estimated monthly financing requirements for the next six months as follows: $ 9,500 April January February 3,500 $ 9,500 10,500 5,500 March 4,500 Short-term financing will be utilized for the next six months. Projected annual interest rates are: January 9.0% April February 10.0% May March 13.0% June Total dollar interest payments a. Compute total dollar interest payments for the six months. Note: Round your monthly Interest rate to 2 decimal places when expressed as a percent. Round your Interest payments to the nearest whole cent. May June 16.0% 12.0% 12.0% b-1. Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six months? Total dollar interest payments Note: Round your monthly Interest rate to 2 decimal places when expressed as a percent. Round your Interest payments to the nearest whole cent. Smaller O Larger b-2. If long-term financing at 12 percent had been utilized throughout the six months, would the total-dollar Interest payments be larger or smaller than with the short-term financing plan?
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
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Carmen's Beauty Salon has estimated monthly financing requirements for the next six months as follows:
January
February
March
$ 9,500
10,500
5,500
Short-term financing will be utilized for the next six months. Projected annual interest rates are:
January
February
March
$ 9,500
3,500
4,500
9.0% April
10.0% May
13.0% June
Total dollar interest payments
April
May
June
a. Compute total dollar interest payments for the six months.
Note: Round your monthly Interest rate to 2 decimal places when expressed as a percent. Round your
Interest payments to the nearest whole cent.
16.0%
12.0%
12.0%
b-1. Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout
the six months?
Total dollar interest payments
Smaller
O Larger
Note: Round your monthly Interest rate to 2 decimal places when expressed as a percent. Round your
Interest payments to the nearest whole cent.
b-2. If long-term financing at 12 percent had been utilized throughout the six months, would the total-dollar
Interest payments be larger or smaller than with the short-term financing plan?
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