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Gina's Donuts has estimated monthly financing requirements for the next six months as follows: January February March $9,200 3,200 April May $9,200 4,200 June 10,200
Gina's Donuts has estimated monthly financing requirements for the next six months as follows: January February March $9,200 3,200 April May $9,200 4,200 June 10,200 5,200 Short-term financing will be utilized for the next six months, Projected annual interest rates are: January February March 6.0% April 7.0% May 10.0% June 13.0% 12.0% 12.0% a. Compute total dollar interest payments for the six months. To convert an annual rate to a monthly rate, divide by 12. (Round intermediate calculations and final answers to 2 decimal places.) Total dollar interest payments $ 3184.33 O b-1. Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six months. Assume a long-term rate is locked in on an interest-only loan. Total dollar interest payments $ 3884 O 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? Larger O Smaller
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