Peg Gasperoni bought a $50,000 life insurance policy for $190 per year. Ryan Life Insurance Company sent her the following billing instructions along with a premium plan example: "Your insurance premium notice will be mailed to you in a few days. You may pay the entire premium in full without a finance charge or you may pay the premium in installments after a down payment and the balance in monthly installments of $50. The finance charge will be added to the unpaid balance. The finance charge is based on an annual percentage rate of 18%." If the total policy premium is: $190 290 390 And you put down: $50.00 70.00 95.00 The balance subject to finance charge will be: $140.00 220.00 295.00 The total number of monthly installments ($30 minimum) will be: 3 5 6 Peg feels that the finance charge of $4.35 is in error. a. What is the actual finance charge for the first three months? Note: Round your answer to the nearest cent. The monthly installment before adding the finance charge will be: $50.00 50.00 50.00 The total finance charge And the total for all deferred installments will be: $4.35 9.25 16.19 payment price will be: $194.35 299.25 406.19
Peg Gasperoni bought a $50,000 life insurance policy for $190 per year. Ryan Life Insurance Company sent her the following billing instructions along with a premium plan example: "Your insurance premium notice will be mailed to you in a few days. You may pay the entire premium in full without a finance charge or you may pay the premium in installments after a down payment and the balance in monthly installments of $50. The finance charge will be added to the unpaid balance. The finance charge is based on an annual percentage rate of 18%." If the total policy premium is: $190 290 390 And you put down: $50.00 70.00 95.00 The balance subject to finance charge will be: $140.00 220.00 295.00 The total number of monthly installments ($30 minimum) will be: 3 5 6 Peg feels that the finance charge of $4.35 is in error. a. What is the actual finance charge for the first three months? Note: Round your answer to the nearest cent. The monthly installment before adding the finance charge will be: $50.00 50.00 50.00 The total finance charge And the total for all deferred installments will be: $4.35 9.25 16.19 payment price will be: $194.35 299.25 406.19
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 27M
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