Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Geoffrey decides not to buy the car mentioned earlier. Instead, he is now considering a food delivery service You, bars, meats that his friend Gillian

image text in transcribed
Geoffrey decides not to buy the car mentioned earlier. Instead, he is now considering a food delivery service "You, bars, meats" that his friend Gillian has recently started. Gillian has agreed that for a single payment of $52,000 today to help her launch her business, she will provide all the delivery services that Geoffrey needs for his business for the next 5 years. Geoffrey is considering borrowing the full amount from his business account. Suppose that Geoff rey makes level quarterly repayments over the coming 5 years, the first payment being exactly 3 months from today. Again, the interest rate on Geoffrey's account is 4.5% p.a. effective (a) Calculate the size of the level quarterly repayment. Answer: (b) How much money does Geoffrey owe on this loan after 1 year? Answer: (c) How much interest does Geoffrey pay in the first year? Answer: (d) Geoff rey believes that the overall benefit from this agreement amounts to $248.30333868814 per week in arrears (this would include money he would have spent on alternative delivery services, estimated additional profits from using Gillian's services, etc). By considering only the initial cost of $62,000 and this weekly benefit of $248.30333868814, calculate the interest rate that represents the return on this investment, expressed as a nominal annual rate compounding weekly

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management For Nurse Managers Merging The Heart With The Dollar Merging The Heart With The Dollar

Authors: J. Michael Leger, Janne Dunham-Taylor

4th Edition

1284127257, 978-1284127256

More Books

Students also viewed these Finance questions

Question

What is the financial outlook of the organization?

Answered: 1 week ago