Date May 17 May 21 Date May 17 Transaction amount REFLECTING What could Esmé have done to avoid this additional cost? May 21 $187.50 $104.19 Transaction amount $187.50 $104.19 REFLECTING Do all financial institutions charge the same interest rates for loans? Explain. 3. Esmé had three overdraft transactions in May. Each transaction cost $3, plus interest at 19%/yr, compounded daily. Her paycheque was deposited electronically on May 31. It covered all the overdrafts. a) Complete the chart to determine what Esmé paid. Time 15 d d Time 15 d Total amount A=P(1 + d b) Suppose Esmé had a personal line of credit with interest at 9.5%/yr, compounded daily. Complete the chart. How much interest would she have paid? 1 = $ = $ Total amount A=P(1+ Interest 1=A-P 1 = $ $187.50 Interest 1=A-P $187.50 c) Should Esmé get a personal line of credit? Explain.

Date May 17 May 21 Date May 17 Transaction amount REFLECTING What could Esmé have done to avoid this additional cost? May 21 $187.50 $104.19 Transaction amount $187.50 $104.19 REFLECTING Do all financial institutions charge the same interest rates for loans? Explain. 3. Esmé had three overdraft transactions in May. Each transaction cost $3, plus interest at 19%/yr, compounded daily. Her paycheque was deposited electronically on May 31. It covered all the overdrafts. a) Complete the chart to determine what Esmé paid. Time 15 d d Time 15 d Total amount A=P(1 + d b) Suppose Esmé had a personal line of credit with interest at 9.5%/yr, compounded daily. Complete the chart. How much interest would she have paid? 1 = $ = $ Total amount A=P(1+ Interest 1=A-P 1 = $ $187.50 Interest 1=A-P $187.50 c) Should Esmé get a personal line of credit? Explain.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 5QTD

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