Problem $6-18($Algo$)$ Interest costs under alternative plans $[$LO$6-3]$

Carmen's Beauty Salon has estimated monthly financing requirements for the next six months as follows:

Short$-$term financing will be utilized for the next sIx months. Projected annual Interest rates are:

a$.$ Compute total dollar Interest payments for the sIx months.

Note: Round your monthly Interest rate to $2$ decimal places when expressed as a percent. Round your Interest payments to the

nearest whole cent.

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?

Note: Round your monthly Interest rate to $2$ decimal places when expressed as a percent. Round your Interest payments to the

nearest whole cent.

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 than with the short$-$term financing plan?

Smaller

Larger