Question: You are purchasing a new computer for your office using the store's installment credit plan. The computer cost $5,991.64. You have enough to make a

You are purchasing a new computer for your office using the store's installment credit plan. The computer cost $5,991.64. You have enough to

You are purchasing a new computer for your office using the store's installment credit plan. The computer cost $5,991.64. You have enough to make a 40% down payment. You are financing the rest for 12 months at a 10% APR. SHOW ALL WORK Term in Months 6 12 18 24 30 MONTHLY PAYMENT ON A $100 LOAN Annual Percentage Rate 10% 12% 15% $17.16 $17.25 $17.40 8.79 8.88 9.03 6.01 6.10 6.24 4.61 4.71 4.85 3.78 3.87 4.02 3.23 3.32 3.47 2.83 2.93 3.07 2.54 2.63 2.78 18% $17.55 9.17 6.38 4.99 4.16 3.62 3.23 2.94 36 42 48 f. Fill in the chart below to determine the portion toward principal, interest and new balance for each month. Explain how you calculate each part. Payment Balance Amount for interest Amount for principal Payment Number 1 2 3 4 5 6 How did you calculate the interest? How did you calculate the amount for principal? How did you calculate the new balance? g. Why do you think the interest is decreasing after each payment? h. After 3 payments, you decide you want to pay off the loan completely, what would be your final payment? i. How much is saved by paying the loan off early? j. Would it be worth paying the loan off early? Why/Why not? You are purchasing a new computer for your office using the store's installment credit plan. The computer cost $5,991.64. You have enough to make a 40% down payment. You are financing the rest for 12 months at a 10% APR. SHOW ALL WORK Term in Months 6 12 18 24 30 MONTHLY PAYMENT ON A $100 LOAN Annual Percentage Rate 10% 12% 15% $17.16 $17.25 $17.40 8.79 8.88 9.03 6.01 6.10 6.24 4.61 4.71 4.85 3.78 3.87 4.02 3.23 3.32 3.47 2.83 2.93 3.07 2.54 2.63 2.78 18% $17.55 9.17 6.38 4.99 4.16 3.62 3.23 2.94 36 42 48 f. Fill in the chart below to determine the portion toward principal, interest and new balance for each month. Explain how you calculate each part. Payment Balance Amount for interest Amount for principal Payment Number 1 2 3 4 5 6 How did you calculate the interest? How did you calculate the amount for principal? How did you calculate the new balance? g. Why do you think the interest is decreasing after each payment? h. After 3 payments, you decide you want to pay off the loan completely, what would be your final payment? i. How much is saved by paying the loan off early? j. Would it be worth paying the loan off early? Why/Why not

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

I included the answers to the prior questions so that you can help me complete the other parts. Thank you. a. What is the amount of down payment? Cost of computer = 5991.64 Down payment is 40% Down...

5. Robert Lewis purchased a new computer for his office using the store's installment credit plan. The computer cost $4,999.99. He made a down payment of 40%. c) What is the down payment? d) What is...

Alan Lewis purchased a new computer for his office using the store's installment credit plan.The computer cost $5991.64.What amount did he finance if he made 40 percent down payment?

Hi , I have done all the journals and entires in general ledgers as well as subsidiary (subsidairy is matching . problem is in unadjusted trial balance which is not matching please help where my...

1. Using the previous balance method, compute the finance charge. Round dollar to the nearest cent. Previous Balance APR finance charge $430.50 18% $ 2. What is the new balance for the credit account...

NON CASH ACTIVITIES What business activities are considered non-cash activities? In order to prepare a cash flow statement, we need to understand which items on our income statement and balance sheet...

JWs Lock & Key had the following transactions in December Dec 1 Paid December's rent, check #6287, $2,175. 2 Paid annual premiums on property and casualty insurance policies, check #6288, 91,967 3...

Background Lois Griffon, 36 years old, is a senior IT programmer with the Calgary Board of Education at its head office, downtown, at Macleod Trail and 5" Ave SE. Her husband, Peter, is 33 years of...

Exercises 153 monopoly reserves where, intuitively, we run the surplus maximiza- tion mechanism SM and then reject any winner i whose value is below her monopoly price o: (a) (a',p') + SM(v), Sz if...

Write a reaction of NaOH with a buffer solution composed of C5H5N and C5H5NHCl. In a written statement, compare the pH after the addition of NaOH to the buffer with the pH after the addition of NaOH...

Burbank Corporation acquired the following property this year: ( Use MACRS Table 1 , Table 2 , and Exhibit 1 0 - 1 0 . ) Burbank acquired the copier in a tax - deferred transaction when the...

A company is preparing completing their Cash Budget. The following data has been prepared for cash receipts and payments. January February March Cash receipts $1,061,200 $1,182,400 $1,091,700 Cash...