Hi,

Please assist with he following:

1)

Shirley, a recent collegegraduate, excitedly described to her older sister the $1,750 sofa, table, and chairs she found today.However, when asked she could not tell her sister which interest calculation method was to be used on hercredit-based purchase. Calculate the monthly payments and total cost for a bank loan assuming aone-year repayment period and 15 percent interest.Now, assume the store uses theadd-on method of interest calculation. Calculate the monthly payment and total cost with aone-year repayment period and 13 percent interest. Explain why the bank payment and total cost are lower even though the stated interest rate is higher.

2)

Camerin wants a new big screen TV and home theater surround soundsystem, which he thinks will cost $4,500. The store will finance up to $4,000 for 2 years at a 18.50 percent interest rate. Assuming Camerin accepts thestore's financing, what will his monthly paymentbe? If he increases his down payment to$1,000, how much will his monthly paymentbe?

3)

Antonio would like to replace his golf clubs with a custom measured set. A local sporting goods megastore is advertising custom clubs for $670, including a new bag.In-store financing is available at 4.79 percent or he can choose not to renew his $500 certificate of deposit(CD), which just matured. The advertised CD renewal rate is 5.23 percent. Antonio knows thein-store financing costs would not affect histaxes, but he knowshe'll pay taxes(25 percent federal and 5.75 percentstate) on the CD interest earnings. Should he cash the CD or use thein-store financing?Why?

4)

Use your financial calculator to compute the monthly payments for a vehicle that costs $10,700 if you financed the entire purchase over four years at an annual interest rate of 6.75 percent. Also calculate the loan payments assuming rates of 5.75 percent and 7.75 percent. Compare the total amount spent on the vehicle under each assumption.