You are employed as an Accounts Clerk at an established company. Your office is in need...

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You are employed as an Accounts Clerk at an established company. Your office is in need of new equipment which costs a total of Ten Thousand dollars ($10,000). You can either purchase the equipment on Hire Purchase, or take a Quick Cash loan of $10,000 to purchase the equipment. Conditions for the options are: Option 1: Hire Purchase price $11,500. A down payment of $1,500 is required. The balance to be paid off over a period of one and a half years (18 months) at an annual interest rate of 18% compounded monthly. Option 2: Quick Cash Loan of $10,000. The loan should be amortized over a period of one year at an annual interest rate of 24% compounded monthly. Required Submit a report on your decision to either take the Quick Cash Loan, or the Hire Purchase option. Show the calculations for each option. Show the monthly interest, and principle payment, as well as the balance after each payment. Also show the total payment for each option. Clearly explain the reasons for your choice, and how your decision can be beneficial to the company you work for. Grading Criteria Calculations Reasons for choice Clarity & content Total 15 marks 5 marks 5 marks 25 marks You are employed as an Accounts Clerk at an established company. Your office is in need of new equipment which costs a total of Ten Thousand dollars ($10,000). You can either purchase the equipment on Hire Purchase, or take a Quick Cash loan of $10,000 to purchase the equipment. Conditions for the options are: Option 1: Hire Purchase price $11,500. A down payment of $1,500 is required. The balance to be paid off over a period of one and a half years (18 months) at an annual interest rate of 18% compounded monthly. Option 2: Quick Cash Loan of $10,000. The loan should be amortized over a period of one year at an annual interest rate of 24% compounded monthly. Required Submit a report on your decision to either take the Quick Cash Loan, or the Hire Purchase option. Show the calculations for each option. Show the monthly interest, and principle payment, as well as the balance after each payment. Also show the total payment for each option. Clearly explain the reasons for your choice, and how your decision can be beneficial to the company you work for. Grading Criteria Calculations Reasons for choice Clarity & content Total 15 marks 5 marks 5 marks 25 marks

Answer rating: 100% (QA)

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