Your local gift shop starts a membership program for its loyal customers. Customers who have a 9-year membership card will get a 18% discount on every purchase and the store owner believes that a loyal customer spends $500 (before discount) on average in the store every year. The market interest rate is 4.8%. If the store owners expectations are correct, how much can she charge for the 9-year membership card? (Note: Assume the customers make all their purchases at the end of the year.) $645.44 $676.42 $698.71 $709.15

Your local gift shop starts a membership program for its loyal customers. Customers who have a 9-year membership card will get a 18% discount on every purchase and the store owner believes that a loyal customer spends $500 (before discount) on average in the store every year. The market interest rate is 4.8%. If the store owners expectations are correct, how much can she charge for the 9-year membership card? (Note: Assume the customers make all their purchases at the end of the year.) $645.44 $676.42 $698.71 $709.15

Name: Your local gift shop starts a membership program for its loyal custom
Uploaded: 2024-03-20T06:50:59.000Z
Channel: Bartleby
Description: Your local gift shop starts a membership program for its loyal customers. Customerswho have a 9-year membership card will get a 18% discount on every purchase andthe store owner believes that a loyal customer spends $500 (before discount) onaverage

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter17: Accounting For Notes And Interest

Section: Chapter Questions

Problem 1MYW

See similar textbooks

Similar questions

Assume that a customer shops at a local grocery store spending an average of $350 a week, resulting in a retailer profit of $30 each week from this customer. Assuming the shopper visits the store all 52 weeks of the year, calculate the customer lifetime value if this shopper remains loyal over a 10-year life span. Also, assume a 6 percent annual interest rate and no initial cost to acquire the customer. How much does the customer yield per year in profits for this retailer? (Round to the nearest dollar.)
A furniture store has a love seat on sale for $699.00, with the payment due one year from today. The store is willing to discoun the price at an annual rate of 5% if you pay today. What is the amount if you pay today? THE SUBJECT IS MONEY AND BANKING.
A consumer faces the following decision. She can buy a computer for $1050 and pay $10 per month for Internet access for three years, or she can receive a $500 rebate on the computer (so that it's cost is $550) but agree to pay $25 per month for three years for Internet access. For simplication, assume that the consumer pays the access fees yearly. (i.e., $10 per month= $120 per year, at the beginning of each year). a. What should the consumer do if the interest rate is 6 percent? b. What if the interest rate is 13 percent? c. At what interest rate would the consumer be indifferent between the two options in percent?
They decide to shop for furnishings for the new house. They choose items that amount to $2400.00. The store has 2 fixed installment loan options for purchasing: Option 1: 20% down payment and financing at 7% simple interest per year for 2 years. Option 2: no down payment and financing at 7.75% simple interest for 3 years. Answer each of the following questions separately, showing all your work to reach each answer.
Christy Smith wants to open a sports bar. If she qualifies for a $250,225 simple discount note at 9% for 280 days, what are her proceeds? (Round your answer to the nearest cent.)
Your mother received an offer from a bank. The flier is offering your mother to open a credit card with that bank. The advertised rate on the flier is only 15%, which is considerably lower compared to other rates offered by competing banks. Then, in the fine print, it said that interest is paid monthly. Your mother asked you what that meant or what would be the effect of that if any. What would you tell her? Compute for the EFF %. How would you explain to her why there is a difference between the 15% and the rate that you computed? Dont use excel
They decide to shop for furnishings for the new house. They choose items that amount to $2400.00. The store has 2 fixed installment loan options for purchasing: Option 1: 20% down payment and financing at 7% simple interest per year for 2 years. Option 2: no down payment and financing at 7.75% simple interest for 3 years. Answer each of the following questions separately, showing all your work to reach each answer. Which option will result in smaller total finance charge? What will that total finance charge be? Which option will result in the smaller monthly payment? What will that monthly payment be? They decide to defer any purchases and invest in a savings account a $2400 bonus that Maria will be getting from work. The rate is 1.5% interest compounded every month. How much interest will they earn in 3 years? They decide to defer any purchases and loan the $2400 bonus to a needy relative at 3% simple interest per year. How long will the term of the loan need…
Angela's bank gave her a 2-year add-on interest loan for $6,120 to pay for new equipment for her antiques restoration business. The annual interest rate is 8.28%. How much interest will she pay? What are her monthly payments? Question content area bottom Part 1 She will pay $enter your response here in interest on the loan. (Round to the nearest cent.) Part 2 Her monthly payments are $enter your response here. (Round to the nearest cent.)
Asher plans to take out a loan of $750 to buy a life sized hamster wheel. Hamster wheel bank charges a compound annual interest rate of 16% interest. After two years how much will Asher owe Hamster Wheel Bank? 1 O $2.90 O $200.25 O $100.92 $1009.20 Jeromey Rome saved up $94 dollars to join the Playas of the Himalayas Federal Credit Union. This credit union pays 10% simple interest. After 5 10 P years, if Jeromey Rome does not touch any money how much will be sitting in his Playas of the Himalayas account? 2 hunna and sum change $94 $141 $47
You are shopping for a car and read the following advertisement in the newspaper: "Own a new Spitfire! No money down. Four annual payments of just$10,000." You have shopped around and know that you can buy a Spitfire for cash for$32,500. What is the interest rate the dealer is advertising (what is the IRR of the loan in the advertisement)? Assume that you must make the annual payments at the end of each year.
Read and analyze the situation below then answers the question given. Your mom asked your opinion if she will be joining the cooperative in her office. She wants to know the amount of money she will be receiving after 6 months and wanted to buy something in December. The cooperative wants her to contribute P1,000 per month beginning in June 2020 which will earn 3% compounded monthly. How much will be the future value of your mom's contribution at the end of December 2020? Tasks: You need to prepare a report showing a cash flow diagram on the total amount of money your mother will earn at the end of December. At the end of your report, write a conclusion stating your opinion to help your mom to decide.
The RentWay company advertises itself as “Rent to own program”. For example, you can rent a $180 TV, and pay $8 a week for 78 weeks, then the TV becomes your property. The going rate for good borrowers at the time was 8% per annum. Calculate the interest rate that you are charged if you get a TV thru the RentWay company? Can you explain why these rates are required and paid. To help you answering the last question, assume that all RentWay renters are belonging to one the following two groups: group 1 (bad credits) rents the TV, never pays a penny back and does not return the TV; group 2 (good credits) rents the TV, pays $8 for 78 weeks. Can you estimate what is the proportion of group 2 customers among the RentWay clients?