Liz's Health Food Store has estimated monthly financing requirements for the next six months as follows:

January$8,400April$8,400February2,400May9,400March3,400June4,400

Short-term financing will be utilized for the next six months. Projected annual interest rates are:

January8.0%April15.0%February9.0%May12.0%March12.0%June12.0%

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$

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$

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?

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