Peg Gasperoni bought a $50,000 life insurance policy for $190 per year. Ryan Life Insurance Company sent her the following billinginstructions along with a premium plan example:"Your insurance premium notice will be mailed to you in a few days. You may pay the entire premium in full without a finance charge oryou may pay the premium in installments after a down payment and the balance in monthly installments of $50. The finance chargewill be added to the unpaid balance. The finance charge is based on an annual percentage rate of 18%."If the totalpolicy premiumis:$190290390And you putdown:Finance Charge$50.0070.0095.00The balancesubject tofinance chargewill be:$140.00220.00295.00$ 4.96The totalnumber ofmonthlyinstallments($30 minimum)will be:Peg feels that the finance charge of $4.35 is in error.a. What is the actual finance charge for the first three months?Note: Round your answer to the nearest cent.356The monthlyinstallmentbefore addingthe financecharge will be:$50.0050.0050.00The totalfinance charge And the totalfor alldeferredinstallmentswill be:$4.359.2516.19payment pricewill be:$194.35299.25406.19

INTRODUCTION: A finance charge is a fee levied for the usage of credit or the extension of current…

Answered: Peg Gasperoni bought a $50,000 life…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Jennifer has a 60-month fixed installment loan, with a monthly payment of $223.04. The amount she borrowed was $11,000.00 at 8.0% APR. A split second after making her 36th payment, Jennifer decided to pay off the remaining balance on the loan. What is the total amount due to pay off the balance? Use the actuarial method. If you use the Finance Charge Table 11.2, page 632, and the "unearned interest formula", page 635, in your textbook to solve this problem, the result will match exactly with one of the answers. If you use a spreadsheet to do the computation, your result will not match exactly with any of the answers, but it will differ only very little (mostly less than $1) from the "correct" answer. $4,788.06 $4,897.69 $4,931.79 $5,063.35
If you are trying to build credit by using a credit card, each time you make a purchase with the credit card, deduct that amount from your checking account. That way, when your credit card bill is due, you will have enough to pay the credit card off in full. Kathy Lehner is going to start doing this. She plans on paying her credit card bill in full this month. How much does she owe with a 6% APR and the following transactions? Note: Round your answer to the nearest cent. 31-day billing cycle 10/1 10/3 Previous balance Credit $ 1,164 10/12 Charge: King Soopers $ 79 $ 148 Credit 10/15 Payment $ 310 Credit 10/25 Charge: Delta $ 321 10/30 Charge: Holiday Fun $ 61 Answer is complete but not entirely correct. Amount owed $ 1,097.56×
Virginia Osterman bought a television set on a 12-month installment plan that included a $39.00 finance charge and called for payments of $54 per month. If she decided to pay the full balance at the end of the eighth month, find the following. (a) the interest refund$ (b) the amount needed to pay off the loan$
Ivan is looking to purchase a home that costs $ 160,000. The interest rate is currently at 3.7%. Use the monthly payment formula below to find Ivan's monthly mortgage payment for the next 30 years. M = P)(1+)¹²t (1+)12t_1 Emilio's savings account had a balance of $621.96 at the end of July. During August, he made three savings account deposits of $83.11, $52.89, and $307.84 and one withdrawal of $129.00. At the end of August his account earned $11.50 in interest. Will Emilio meet his savings account goal of $1,000 by September 1st?
Jane Zahrley’s request for a five-year automobile loan for $39,000 has been approved. Reston Bank will require equal monthly installment payments for 60 months. The bank tells Jane that she must pay a total of $5,500 in finance charges. What is the loan’s APR?
Elin purchased a used car for $9,500. She wrote a check for $2,000 as a down payment for the car and financed the $7,500 balance. The annual percentage rate (APR) is 3% compounded monthly, and the loan is to be repaid in equal monthly installments over the next three years. Which of the following is most near to Elin's monthly car payment?
Mayesha purchased a large screen TV for $4,000 and can pay it off in ten months with an add-on interest loan at an annual rate of 11.5%, or she can use her credit card that has an annual rate of 18%. If she uses her credit card, she will pay $400 per month (starting next month) plus the finance charges for the month. Assume that her credit card company uses the unpaid balance method to compute her finance charges and that she is making no other transactions on her credit card. Which option will have the smaller total finance charges on her loan? What is the general method that should be used to solve this problem? A. Use the formula l= Prt to find the finance charge for both the add-on and the credit card option. Choose the option that produces the lower number. O B. Multiply the cost of the TV set by the annual rate to find the finance charge for both the add-on and the credit card option. Choose the option that produces the higher number. O C. Use the formula l= Prt to find the…
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…
Jim and Joan Miller are borrowing $120,000 at 6.5% per annum compounded monthly for 30 years to purchase a home. Their monthly payment is determined to be $758.48. You need to present Jim and Joan with a report detailing the following: A recursive formula for their balance after each monthly payment has been made. A determination of Jim and Joan's balance after the first payment. Use a spreadsheet or graphing utility to create a table showing their balance after each monthly payment. Determine when the balance will be below $75,000. Determine when the balance will be paid off. Determine the interest expense when the loan is paid.
If you are trying to build credit by using a credit card, each time you make a purchase with the credit card, deduct that amount from your checking account. That way, when your credit card bill is due, you will have enough to pay the credit card off in full. Kathy Lehner is going to start doing this. She plans on paying her credit card bill in full this month. How much does she owe with a 9% APR and the following transactions? (Round your answer to the nearest cent.) 31-day billing cycle 10/1 Previous balance 10/3 Credit 10/12 Charge: King Soopers 10/15 Payment 10/25 Charge: Delta 10/30 Charge: Holiday Fun Amount owed $84 cr. $143 $260 cr. $316 $56 Check my $ 1,159
If you are trying to build credit by using a credit card, each time you make a purchase with the credit card, deduct that amount from your checking account. That way, when your credit card bill is due, you will have enough to pay the credit card off in full. Kathy Lehner is going to start doing this. She plans on paying her credit card bill in full this month. How much does she owe with a 6% APR and the following transactions? (Round your answer to the nearest cent.) 31-day billing cycle $ 1,173 $ 70 cr. 10/1 Previous balance 10/3 Credit 10/12 Charge: King Soopers $ 157 $ 400 cr. $ 330 10/15 Payment 10/25 Charge: Delta 10/30 Charge: Holiday Fun $ 70
Joe has a Sports Academy credit card. The card has a balance of $2751.29 with an APR of 26.79%. The Academy expects the minimum payment to be 3.7% of the balance. What is Joe’s minimum payment? How long will it take Joe to pay off his Sports Academy credit card? How much interest will Joe pay if he only pays the minimum payment?Minimum payment Months to payoff Interest

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