Question
Lizs Health Food Store has estimated monthly financing requirements for the next six months as follows: January $9,800 April $9,800 February 3,800 May 10,800 March
Lizs Health Food Store has estimated monthly financing requirements for the next six months as follows:
| January | $9,800 | April | $9,800 | ||
| February | 3,800 | May | 10,800 | ||
| March | 4,800 | June | 5,800 | ||
Short-term financing will be utilized for the next six months. Projected annual interest rates are:
| January | 7.0% | April | 14.0% | ||
| February | 8.0% | May | 12.0% | ||
| March | 11.0% | June | 12.0% | ||
. 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 $
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