BF 8 and 9 hw solutions submitted

# BF 8 and 9 hw solutions submitted - outweigh what you would...

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Feb. 20 Ch. 8 P4 Effective rate = interest/principal x 360/days in loan outstanding \$25/\$2000 X 360/45 = .10 10% P6 Effective rate on a discounted loan = interest/principal – interest X 360/days in loan outstanding =240/3,000 - 240 x 360/365 = .09 9% P7 Effective rate on a discounted loan = interest/principal – interest X 360/days in loan outstanding =140/5,000 – 140 x 360/90 = .12 12% P20 3/10 n80 70days rather than 80days Cost of failing to take a cash discount = disc.%/100% - disc% x 360/final due date – disc. per. = 3%/100%-3% x 360/(80-10) = .15 15% P21 2/10 n55

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I do not agree with Mr. Duke’s proposal. I don’t think it would help the company any to pay that much extra in interest and compensating balance to
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Unformatted text preview: outweigh what you would make from the decrease. Feb. 25 Ch. 9 P2 a. \$8,000 @ 6% over 10 yrs 4,800 =8,000x.06x10 b. \$16,000 @ 12% over 5 years 9,600 =16,000x.12x5 c. \$25,000 @ 8% over 15 years 30,000 =25,000x.08x15 d. \$1,000 @ 20% over 40 periods 8,000 =1,000x.20x40 P26 a. \$23,956 @ the end of 9 years @ 7 % 23,956x.07x9 = 15,092.28 23,956 15,092.28 = \$8,863.72 needed as an initial deposit to make it to the goal of \$23,956. b. \$8,863.72/9 = \$984.86 at the end of each year for nine consecutive years to achieve the goal of \$23,956. P38 \$20,000 @ 8% over 4 years &gt;&gt;&gt; the amount will go up 8% per year Pay off loan in over 12 years @ 11 % A = \$20,000/6.492 = 3,080.71 paid annually....
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## BF 8 and 9 hw solutions submitted - outweigh what you would...

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