I am really having problems with a Average Daily Balance. Can someone please try and help me. This is for a Personal Finance class

\f2. Monthly Payments and Finance Charges: Kimberly Jensen of Storm Lake, Iowa, wants to buy some living room furniture for her new apartment. A local store offered credit at an APR of 16 percent, with a maximum term of four years. The furniture she wishes to purchase costs $4800, with no down payment required. Using Table 7-2 or the Garman/Forgue companion website, make the following calculations: APR 5 6 7 8 9 10 11 12 13 14 15 16 12 85.61 86.07 86.53 86.99 87.45 87.92 88.38 88.85 89.32 89.79 90.26 90.73 24 43.87 44.32 44.77 45.23 45.68 46.14 46.61 47.07 47.54 48.01 48.49 48.96 36 29.97 30.42 30.88 31.34 31.80 32.27 32.74 33.21 33.69 34.18 34.67 35.16 48 23.03 23.49 23.95 24.41 24.88 25.36 25.85 26.33 26.83 27.33 27.83 28.34 (a) What is the amount of the monthly payment if she borrowed for four years? 4.800 x 28.34 = $136.03/mth (b) What are the total finance charges over that four-year period? Her finance charges would be $1729.44 for a four-year period. 136.03 * 48 = 6529.44 - 4800 = $1729.44 (c) How would the payment change if Kimberly reduced the loan term to three years? The payment would change to 4.800 x 35.16 = $168.77 (d) What are the total finance charges over that three-year period? Her finance charges would be $1275.72 for a three-year period. 168.77 x 36 = 6075.72 - 4800 = $1275.72 (e ) How would the payment change if she could afford a down payment of $500 with four years of financing? a. If she would put $500 down her payment would be 4.300 x 28.34 = $121.86/mth (f) What are the total finance charges over that four-year period given the $500 down payment? Her finance charges would be $1549.38 for a four-year period with the $500 down payment. $121.86 x 48 = 5849.28 - 4300 = 1549.28 3. Average Daily Balance and Finance Charges: Kayla Sampson, an antiques dealer from Mankato, Minnesota, received her monthly billing statement for April for her MasterCard account. The statement indicated that she had a beginning balance of $600, on day 5 she charged $150, on day 12 she charged $300, and on day 15 she made a $200 payment. Out of curiosity, Kayla wanted to confirm that the finance charge for the billing cycle was correct. (a) What was Kayla's average daily balance for April without new purchases? Without new purchases it would be 9000-3000 / 30 = 200 (b) What was her finance charge on the balance in part (a) if her APR is 19.2 percent? .192/12 = .016 .016 # 200 = $3.20 (c ) What was her average daily balance for April with new purchases? Day 1-4 = 2400; Day 5-11= 5250; Day 12-14 =3150; Day 15-30 =11250 total 22050 Divide by the billing cycle That would be 22050/30 = 735 (e) What was her finance charge on the balance in part if her APR is 19.2 percent? .192/12 = .016 .016 * 735 = $11.76 4. Average Daily Balance: Alexis Monroe, a biologist from Dyersburg, Tennessee, is curious about the accuracy of the interest charges shown on her most recent credit card billing statement, which appears as Figure 7-1 on page 208. Use the average daily balances provided to recalculate the interest charges, and compare the result with the amount shown on the statement. 5. Comparing APRs: James Sprater of Grand Junction, Colorado, has been shopping for a loan to buy a used car. He wants to borrow $18000 for four or five years. James's credit union offers a declining balance loan at 9.1 percent for 48 months, resulting in a monthly payment of $448.78. The credit union does not offer fiveyear auto loans for amounts less than $20,000, however. If James borrowed $18,000, this payment would strain his budget. A local bank offeed current depositors a five-year loan at a 9.34 percent APR, with a monthly payment of $376.62. This credit would not be a declining balance loan. Because James is not a depositor in the ban, he would also be charged a $25 credit check fee and a $45 application fee. James likes the lower payment but knows that the APR is the true cost of credit, so he decided to confirm the APRs for both loans before making his decision. (a) What is the APR for the credit union loan? (b) Use the n-ratio formula to confirm the APR on the bank loan as quoted for depositors. APR = Y(95P+9)F 12P(P+1)(4D+F) = 12(95(48) + 9)(6552) 12(48)(48+1)(4 x 18000 + 6552) =12(4569)(6552) (576)(49)(78552) =359233056 2217051648 =.1620 or 16.2% What is the add-on interest rate for the bank loan? (d) What would be the true APR on the bank loan if James did not open an account to avoid the credit check and application fees? 6. Rule of 78s: Miguel Perez of Pamona, California, obtained a two-year installent loan for $1500 to buy a television set eight months ago. The loan had a 12.6 percent APR and a finance charge of $204.72. His monthly payment is $71.03. Miguel has made eight monthly payments and now wants to pay off the remainder of the loan. The lender will use the rule of 78s method to calculate a prepayment penalty. (a) How much will Miguel need to give the lender to pay off the loan? $1043.68 (b) What is the dollar amount of the prepayment penalty on this loan? 300.00