Question
Carmens Beauty Salon has estimated monthly financing requirements for the next six months as follows: January $ 10,300 April $ 10,300 February 4,300 May 11,300
Carmens Beauty Salon has estimated monthly financing requirements for the next six months as follows:
January | $ | 10,300 | April | $ | 10,300 |
February | 4,300 | May | 11,300 | ||
March | 5,300 | June | 6,300 | ||
Short-term financing will be utilized for the next six months. Projected annual interest rates are:
January | 7.0 | % | April | 14.0 | % |
February | 8.0 | % | May | 12.0 | % |
March | 11.0 | % | June | 12.0 | % |
a. Compute total dollar interest payments for the six months. (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent.)
Total Dollar Interest Payments |
b-1. Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six months? (Round your monthly interest rate to 2 decimal places when expressed as a percent. Round your interest payments to the nearest whole cent.)
Total Dollar interest payments |
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?
Larger or
-
Smaller
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