Financial Accounting Question Solution provide Answer please James wants to buy a flat screen television for his new apartment. Hehas saved $700, but still needs $500 more. The bank where he has achecking and savings account will loan him $500 at 12% annual interestusing a 90-day promissory note. James also visited the PayDay Loanstore to compare the cost of borrowing.The manager told James that he could borrow $500 at 12% for twoweeks. If James needed more time to repay the loan, he would becharged 16% on the balance due for each additional week. He wonderedhow much it would cost to pay the loan back in 12 weeks so he couldcompare the cost to the bank's lending rate. He recognized that 12weeks is a few days less than 90 days.1) Calculate the total cost (principal plus interest) for the 90-daypromissory note from the bank.2) How much will James pay if he gets the loan from the PayDay Loanstore and pays the balance back in two weeks?3) How much will it cost if James gets his loan from the PayDay Loanstore and pays it back in 12 weeks (nearly 90 days)?

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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