You purchase a new TV with a store credit card for $800. You have a year to pay off the TV, but interest accrues. The nominal rate is 12% compounded weekly. You pay back the full amount plus interest in one year, How much do you owe? a. 866.51 O b. 832.59 O c. 901.87 d. 896

You purchase a new TV with a store credit card for $800. You have a year to pay off the TV, but interest accrues. The nominal rate is 12% compounded weekly. You pay back the full amount plus interest in one year, How much do you owe? a. 866.51 O b. 832.59 O c. 901.87 d. 896

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 31P

See similar textbooks

Related questions

Q: If you borrow $3,600 to buy a car at 12% per year compounded monthly, to be repaid over the next…

A: Answer Borrowing amount = $3,600 Interest rate = 12% per year Interest rate monthly = 1% Time…

Q: suppose that you would like to save $20,000 over 5 years to use as a down payment for a house by…

A: Computation of monthly deposit:Hence, the monthly deposit into the account is $301.66 per month.

Q: Hunan bought a car priced at dollar 15,700 for 15% down and equal monthly payment for five years, if…

A: The monthly installment is the regular monthly payment that is required to pay for the purchase of…

Q: You borrowed $550,000 from a bank at an interest rate of 50% compounded quarterly to purchase a new…

A: Rate of interest monthly = 50% / 12 = 4.1666% Periods = 12 * 2 = 24 months Monthly Installment =…

Q: You would like to have $8,000.00 in 15 years for a special vacation following graduation by making…

A: Using the PMT function in excel

Q: You borrow $21421 to buy a car. You will have to repay this loan by making equal monthly payments…

A: Formula for calculating EMI: EMI = (P X R/12) X [(1+R/12) ^N] / [(1+R/12) ^N-1] P = Loan amount r=…

Q: A woman wants to borrow $10,742 in order to buy a car. She wants to repay the loan by monthly…

A: Formula EMI = PV/[1-(1+R)-N]/R Where EMI - Equal monthly instalment PV - Loan amount i.e. $10,742 R…

Q: In order to buy a car, you borrow $25,000 from a friend at 12%/year compounded monthly for 4 years.…

A: a.

Q: In order to buy a car, you borrow $30,000 from a friend at 8%/year compounded monthly for 4 years.…

A: Loan amount (PV) = $ 30,000 Interest rate = 8% Monthly interest rate (r) = 8%/12 =…

Q: Use PMT= to determine the regular payment amount, rounded to the nearest dollar. Your credit card…

A: The PMT function is a type of financial function which helps to determine the total payment…

Q: You borrow $18826 to buy a car. You will have to repay this loan by making equal monthly payments…

A: Borrowed amount is $18826 Time period is 5 years APR is 12% To Find: Monthly payment

Q: You go to a phone dealer to buy a new car for 22,000 pesos financed at 3.4% APR, compounded monthly,…

A: The monthly payment can be calculated with the help of present value of annuity function

Q: You decide that you can spend 600 as a monthly payment for a new car. Your bank offers car loans at…

A: The amount that can be borrowed should equal the present value of future payments. This is based on…

Q: You have $4,500 on a credit card that charges a 21% interest rate. If you want to pay off the credit…

A: Using excel PMT function

Q: Solve Problem 20.11 using Excel.

A: Loans refer to the amount that is borrowed on credit by the individual or the company from the banks…

Q: You buy a house and finance $250,000 at 4% per year. One loan is 30 years (360 monthly рayments) and…

A: Monthly payments is calculated by present value of annuity formula. r is annual percentage rate and…

Q: To purchase a new car, you borrow $20,000. The bank offers a 6-year loan at an interest rate of…

A: The future value is the future worth of the amount that has to be paid or received in the present.

Q: magine you have a credit card balance of $1,000 that you would like to pay off within one year. The…

A: The credits cards are settled on the monthly payments and are paid by monthly payments and these…

Q: You purchase a washing machine and dryer for P750. You pay 20% down and agree to repay the balance…

A: The time value of money concept is applied in the case of the calculation of interest. Compounding…

Q: You purchase a home and secure a 30 year equal payment loan for $200,000 at a interest rate of 5.25%…

A: The number of months to stay will be around 6 months.

Q: You have $5,000 on a credit card that charges a 23% interest rate. If you want to pay off the credit…

A: Credit Card Amount = $5,000 Interest rate = 23% Time duration = 4 years

Q: You put $1,000 into a savings account today that offers a 55% APR with semi-annual compounding…

A: GIVEN, PV = $1000 N = 2 M = 2 (SEMI ANNUAL) R=55%

Q: You head over to Check-N-Go for a quick loan. The loan is for $500 and you pay it back two weeks (14…

A: Effective annual interest rate is the rate which is charged by an institution from the borrower on…

Q: You have $4,000 on a credit card that charges a 18% interest rate. If you want to pay off the credit…

A: The question gives the following information:

Q: You wish to have $4,000 in 2 years to purchase a new entertainment system. How much money (to the…

A: Future value of an annuity: It represents the future value of the present annuity stream of cash…

Q: If you borrow $3,600 to buy a car at 15% per year compounded monthly, to be repaid over the next…

A: Monthly Payment = P x r / [1 - {1 / (1 + r)^n}] Here, P = Present Value or Loan Amount i.e. $3600 r…

Q: You have $3,500 on a credit card that charges a 14% interest rate. If you want to pay off the credit…

A: PMT= Present Value of annuity/{1-[1/(1+r)^n]/r} Where r =rate of interest per period i.e. 14%/12=…

Q: your credit card has a balance of $4,500 and an annual interest rate of 16%. you decide to pay off…

A: The monthly deposit is calculated by dividing the loan balance with the PVIFA at 1.33% and 36…

Q: Suppose that you buy a car costing $14,000. You agree to make payments at the end of each monthly…

A: The payments made to purchase this car is a form of an annuity. Thus, the value of each payment can…

Q: You make a down payment of $1,500 to purchase a used car worth $5,500.00 cash price and finance the…

A: Time value concept Receiving the value today is of more value than that of receiving the same amount…

Q: You have $4,500 on a credit card that charges a 14% interest rate. If you want to pay off the credit…

A: Monthly Payment: Monthly payments let a borrower pay down part of the remaining sum, which is…

Q: To buy a car, you borrow $25,000 with a term of three years at an APR of 6.5%. What is your monthly…

A: Using the Pmt function in excel

Q: An individual needs $12,000 immediately as a down payment on a new home. Suppose that he can borrow…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: You borrow $22541 to buy a car. You will have to repay this loan by making equal monthly payments…

A: In order to calculate the monthly payment on the financial calculator, firstly we are required to…

Q: You plan to save money for a down payment of $37,000 to purchase an apartment. You can only afford…

A: Amount needs to save "FV" is $37,000 Savings per Quarter "PMT" is $1,250 Interest rate is 3.71%…

Q: You are ready to buy a new car. You can afford to repay $300 each month for 60 months (paid at the…

A: In this question we require to calculate the amount we can spend on car i.e. present value of the…

Q: If you buy a computer directly from the manufacturer for $2,241 and agree to repay it in 48equal…

A: Using Excel PMT function.

Q: You have $2,000 on a credit card that charges a 17% interest rate. If you want to pay off the credit…

A: Credit card amount due (PV) = $2000 Annual interest rate = 17% Monthly interest rate = 17%/12 =…

Q: You are a financial adviser, and your client wants to save $6,000 in order to make a downpayment for…

A: Future value (FV) = $6,000 Quarterly interest rate (r) = 0.009 (0.036 / 4) Quarterly period (n) = 8…

Q: You have accepted a loan in an amount of $15,000 for your new car. You have agreed to pay the loan…

A: Here, Loan Amount is $15,000 Time Period is 4 years Interest Rate is : 9% 6% 7% 8% Compounding…

Q: You want to buy a car and you want your payments to be $500 per month. You can finance the car for…

A: Equated monthly installment (EMI): = [P×R×(1+R)n] ÷ [(1+R)n-1]

Q: You bought a car and borrowed $25,067 for 48 months. If the rate is 3.56%, what is your monthly…

A: Loan amount (L) = $25067 n = 48 months r = 3.56% per annum = 0.29667% per month X = Monthly payment

Q: Your credit card has a balance of 5400 and an annual interest rate of 12%. You decide to pay the…

Q: suppose you want to buy a new car that costs you 15514 OMR by a loan from bank Muscat for 6 years.…

A: Given: Loan = OMR 15,514 Interest rate = 4.004% Year = 6

Q: Hamilton wants to accumulate ₺ 100.000 at the end of 4 years. It starts quarterly payments in a bank…

Question

100%

You purchase a new TV with a store credit card for $800. You have a year to pay off the TV, but interest accrues. The nominal
rate is 12% compounded weekly. You pay back the full amount plus interest in one year, How much do you owe?
O a. 866.51
O b. 832.59
O c. 901.87
O d. 896

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Money Management and Achieving Financial Goals

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?
suppose you want to buy a new car that costs you 15514 OMR by a loan from bank Muscat for 6 years. the bank charges you 4.004 percent on your loan. what is the annual payment should you pay to the bank every year on your loan?
Suppose you get a student loan for $8,000, and your payments are deferred until after you graduate, 2 years from now. Then, you will make 15 yearly payments (starting 2 years from now). What are your payments? The interest rate is 8%/year. a. $845 b. $ 934 c. $ 976 d. $1,009
You decide to borrow $250,000 to build a new home. The bank charges an interest rate of 8% compounded monthly. If you pay back the loan over 30 years, what will your monthly payments be ( rounded to the nearest dollar)? a. $1, 123 b. $ 1, 237 c. $1, 687 d. $1, 834
Use PMT = to determine the regular payment amount, rounded to the nearest dollar. Your credit card has a balance of S$3600 and an annual interest rate of 12%. You decide to pay off the balance over five years. If there are no further purchases charg -nt7 1- 1+ a. How much must you pay each month? b. How much total interest will you pay? a. The monthly payments are approximately S- (Do not round until the final answer. Then round to the nearest dollar as needed.) b. The total interest paid over 5 years is approximately S (Round to the nearest dollar as needed.) Enter your answer in each of the answer boxes
You borrow $18826 to buy a car. You will have to repay this loan by making equal monthly payments for 5 years. The bank quoted an APR of 12%. How much is your monthly payment (in $ dollars)? $_______
You have just signed up for a very strange loan - one that is amortized on a WEEKLY basis (i.e. you make weekly principal and interest payments). The loan is for $1,000 at an annual interest rate of 5.2%. If you make weekly payments over the course of a year (i.e. 52 weeks), what is your weekly payment amount? O 19.01 O 19.74 O 19.58 20.23 O 19.23
A customer of your bank comes for a car loan 10000 OMR. He is charged with an interest rate of 5% per year. The customer expects a monthly repayment schedule from you, to plan his repayment. Provide a loan amortization schedule for a monthly repayment of 1 year. (Amortization factor is 0.952 )
You lend a friend $50,000. Your friend will repay you in 6 equal annual end-of-year payments of $12,000. You will receive the first payme one year from now. What rate of return does your loan earn? 14.86% 12.50% 11.53% 6.00%