Julie has a low credit rating, plus she was furloughed from her job 2 months ago. She has a new job starting next week and expects a salary to start again in a couple of weeks. Since she is a little short on money to pay her rent, she decided to borrow $100 from a loan company, which will charge her only $10 interest if the $110 is paid no more than 1 week after the loan is made. What are the: (Draw the Cashflow) (a) nominal annual and

Julie has a low credit rating, plus she was furloughed from her job 2 months ago. She has a new job starting next week and expects a salary to start again in a couple of weeks. Since she is a little short on money to pay her rent, she decided to borrow $100 from a loan company, which will charge her only $10 interest if the $110 is paid no more than 1 week after the loan is made. What are the: (Draw the Cashflow) (a) nominal annual and

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter6: Business Expenses

Section: Chapter Questions

Problem 89TPC

See similar textbooks

Similar questions

9. Julie has a low credit rating, plus she was furloughed from her job 2 months ago. She has anew job starting next week and expects a salary to start again in a couple of weeks. Since sheis a little short on money to pay her rent, she decided to borrow $100 from a loan company,which will charge her only $10 interest if the $110 is paid no more than 1 week after the loanis made. What are the: (Draw the Cashflow)(a) nominal annual and(b) effective annual interest rates that she will pay on this loan?
Jane James owns an appliance store. She usually receives $50,000 worth ofappliances per month. She does not like to owe people money and alwayspays her bills on the day she receives the invoice. Someone told her thatif she delayed payment, she could actually increase her profit because themoney would be earning interest in her account. She went through her billsand found that she actually had an additional 10 days, on average, to payher invoices. She also found that she was earning 2 percent interest on themoney she had in her money market savings account.a. If she delayed payment by the 10 days, how much additional interest wouldshe earn for the year?b. Explain how this problem represents a disbursement float.
AKA works in an accounts payable department?
Like many college students, Diana applied for and got a credit card that has an annual percentage rate (APR) of 15%. The first thing she did was buy a new DVD player for $400. At the end of the month, her credit card statement said she only needed to make a minimum monthly payment of $15. Assume Diana makes her payment when she sees her statement at the end of each month. If Diana doesn't charge anything else and only makes the minimum monthly payments, approximately how many months would it take her to completely pay off the DVD player? Assume that the credit card company compounds interest at the end of each month. O 35.8 months O 37.8 months O 46.3 months O 50.0 months O 32.6 months Diana now realizes she needs to pay more than just the minimum payment (unless she wants to be paying for this DVD player until she graduates). She decides to pay twice the minimum monthly payment ($30 per month), instead. How much quicker will she pay off the DVD player? 19.5 months O 26.4 months O 21.1…
A career counselor decides to make monthly payments of $150 on credit card debt of $3489.64 and discontinue using the credit card. (a). Assuming the annual interest rate is 22.2%, how many months will it take her to repay the debt? Round to the next month. b) How many fewer months would it take to repay the debt if the counselor makes monthly payments of $200. Round to the next month.
Steven is beginning a new job but has not yet been paid. He needs $700 to pay his rent this month. Steven is going to borrow the money through a Payday Loan establishment. They are charging him an $70 fee to borrow the money for 12 days until he receives his first paycheck. What is the effective annual interest rate that Steven is being charged?
4
Phillamone Berry has a car loan with a company that refunds interest using the rule of 78 when loans are paid in full ahead of schedule. He is using an employee bonus to pay off his car, which is on a 41-month loan. The total interest for the loan is $2,310 and he has 17 more payments to make. How much finance charge will he get credit for if he pays the loan in full immediately?
Nick is a full-time college student who plans to graduate in 10 months. He works a limited number of hours each week to pay for car insurance, but he can't work more hours due to his class schedule. He is choosing between two 6-year student loans for $15,000 each. • Loan 1 has a 2.5% annual interest rate with a $224.57 monthly payment. Monthly payments are required immediately. • Loan 2 has monthly payments that are not required for 1 year, but interest accrues during that time. The annual interest is 3.5% compounded monthly. Then $238.56 monthly payments are made for 6 years. The loan Nick chooses will pay his tuition and living expenses, and it will also give him an extra $75 per month. Which loan should Nick choose and why? Nick should choose Loan 1 because the interest rate and the monthly payment are both lower. This means the total interest paid for this loan would be lower than the other one. Nick should choose Loan because no interest accrues during the first year. This means…
Madeline Rollins is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Madeline is living at home and works in a shoe store, earning a gross income of $960 per month. Her employer deducts a total of $170 for taxes from her monthly pay. Madeline also pays $115 on several credit card debts each month. The loan she needs for chiropractic school will cost an additional $170 per month. Calculate her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (Enter your answers as a percent rounded to 2 decimal places.) With college loan Without college loan Debt Payments-to- Income Ratio
Karen Wilson thinks that she needs to borrow $7,600 for 2 years. She doesn’t have a very good credit rating, so most finance companies want to charge her a high interest rate. She finally finds a lender that will loan her the money at 12% compounded monthly. How much interest will Karen have to pay to this particular lender?
Camila Martinez has several credit cards, on which she is carrying a total current balance of $6,500. She is considering transferring this balance to a new card issued by a local bank. The bank advertises that, for a 4 percent fee, she can transfer her balance to a card that charges a 0 percent interest rate on transferred balances for the first 6 months. Calculate the fee that Camila would pay to transfer the balance. $ Describe the benefits and drawbacks of balance transfer cards.