You are the owner of four Taco Bell restaurant locations. You have a business loan with Citizens Bank taken out 54 days ago that is due in 116 days. The amount of the loan is $37,000, and the rate is 7.5% using ordinary interest. You currently have some excess cash. You have the choice of sending Citizens $19,800 now as a partial payment on your loan or purchasing an additional $19,800 of serving supplies such as food containers, cups, and plastic dinnerware for your inventory at a special discount price that is "12% off" your normal cost of these items. a. How much interest will you save on this loan if you make the partial payment and don't purchase the additional serving supplies? Do not round intermediate calculations. Round final answer to the nearest cent. $ b. How much will you save by purchasing the discounted serving supplies and not making the partial payment? Do not round intermediate calculations. Round final answer to the nearest cent. $
You are the owner of four Taco Bell restaurant locations. You have a business loan with Citizens Bank taken out 54 days ago that is due in 116 days. The amount of the loan is $37,000, and the rate is 7.5% using ordinary interest. You currently have some excess cash. You have the choice of sending Citizens $19,800 now as a partial payment on your loan or purchasing an additional $19,800 of serving supplies such as food containers, cups, and plastic dinnerware for your inventory at a special discount price that is "12% off" your normal cost of these items. a. How much interest will you save on this loan if you make the partial payment and don't purchase the additional serving supplies? Do not round intermediate calculations. Round final answer to the nearest cent. $ b. How much will you save by purchasing the discounted serving supplies and not making the partial payment? Do not round intermediate calculations. Round final answer to the nearest cent. $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
You are the owner of four Taco Bell restaurant locations. You have a business loan with Citizens Bank taken out 54 days ago that is due in 116 days. The amount of the loan is $37,000, and the rate is 7.5% using ordinary interest.
You currently have some excess cash. You have the choice of sending Citizens $19,800 now as a partial payment on your loan or purchasing an additional $19,800 of serving supplies such as food containers, cups, and plastic dinnerware for your inventory at a special discount price that is "12% off" your normal cost of these items.
a. How much interest will you save on this loan if you make the partial payment and don't purchase the additional serving supplies?
Do not round intermediate calculations. Round final answer to the nearest cent.
Do not round intermediate calculations. Round final answer to the nearest cent.
$
b. How much will you save by purchasing the discounted serving supplies and not making the partial payment?
Do not round intermediate calculations. Round final answer to the nearest cent.
Do not round intermediate calculations. Round final answer to the nearest cent.
$
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