Question
Carmens Beauty Salon has estimated monthly financing requirements for the next six months as follows: January $ 9,400 April $ 9,400 February 3,400 May 10,400
Carmens Beauty Salon has estimated monthly financing requirements for the next six months as follows:
January | $ | 9,400 | April | $ | 9,400 |
February | 3,400 | May | 10,400 | ||
March | 4,400 | June | 5,400 | ||
Short-term financing will be utilized for the next six months. Projected annual interest rates are:
January | 8.0 | % | April | 15.0 | % |
February | 9.0 | % | May | 12.0 | % |
March | 12.0 | % | 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.)
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.)
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?
multiple choice
-
Larger
-
Smaller
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started