You are the owner of four Taco Bell restaurant locations. You have a business loan with Citizens Bank taken out 60 days ago that is due in 90 days. The amount of the loan is $50,000, and the rate is 9.5% using ordinary interest. You currently have some excess cash. You have the choice of sending Citizens $35,000 now as a partial payment on your loan or purchasing an additional $35,000 of serving supplies such as food containers, cups, and plastic dinnerware for your inventory at a special discount price that is "10% off" your normal cost of these items. (a) How much interest in $) will you save on this loan if you make the partial payment and don't purchase the additional serving supplies? (Round your answer to two decimal places.) $ (b) How much (in $) will you save by purchasing the discounted serving supplies and not making the partial payment? (Hint: Find the difference of the savings on the supplies and the potential savings on the loan found in part (a). Round your answer to two decimal places.) $ (c) What other factors should you consider before making this decision? Calculate the bank discount and proceeds (in $) for the simple discount note. Use the ordinary interest method, 360 days, when applicable. (Round your answers to the nearest cent.) Face Value Discount Rate (%) Term Bank Discount Proceeds $65,000 9.35 11 months $ $ Using ordinary interest, 360 days, calculate the missing information for the simple discount note. (Round dollars to the nearest cent.) Face Value Discount Rate (%) Date of Note Term (days) Maturity Date Bank Discount (in $) Proceeds (in $) $79,000 5 May 4 51 ---Select--- V $ $ You are the owner of four Taco Bell restaurant locations. You have a business loan with Citizens Bank taken out 60 days ago that is due in 90 days. The amount of the loan is $50,000, and the rate is 9.5% using ordinary interest. You currently have some excess cash. You have the choice of sending Citizens $35,000 now as a partial payment on your loan or purchasing an additional $35,000 of serving supplies such as food containers, cups, and plastic dinnerware for your inventory at a special discount price that is "10% off" your normal cost of these items. (a) How much interest in $) will you save on this loan if you make the partial payment and don't purchase the additional serving supplies? (Round your answer to two decimal places.) $ (b) How much (in $) will you save by purchasing the discounted serving supplies and not making the partial payment? (Hint: Find the difference of the savings on the supplies and the potential savings on the loan found in part (a). Round your answer to two decimal places.) $ (c) What other factors should you consider before making this decision? Calculate the bank discount and proceeds (in $) for the simple discount note. Use the ordinary interest method, 360 days, when applicable. (Round your answers to the nearest cent.) Face Value Discount Rate (%) Term Bank Discount Proceeds $65,000 9.35 11 months $ $ Using ordinary interest, 360 days, calculate the missing information for the simple discount note. (Round dollars to the nearest cent.) Face Value Discount Rate (%) Date of Note Term (days) Maturity Date Bank Discount (in $) Proceeds (in $) $79,000 5 May 4 51 ---Select--- V $ $
