a. Rent-to-own has a scheme to sell furniture on monthly installments for two years.

a. Rent-to-own has a scheme to sell furniture on monthly installments for two years. The APR quoted for this deal is 15.9% annual but with interest compounded monthly. You decided to buy some furniture for your office under this scheme. Your monthly payment installment is decided as $85 for two years. Calculate the total value of furniture you bought.

b. Jack sold goods worth $8,500 to one of his customer on credit. This customer is in financial difficulty and struck a deal to pay the money back with monthly installment of $770 at the end of each month for 12 months. What is the interest rate charged on this deal (APR)?

c. Peter decided to buy a used dealer certified car from the authorized car dealer. The car has a sticker price of $12,000 for sale. Peter a loan from his local bank for five years. Peter would need to pay a monthly payment of $158.04 per month for this car payable at the end of each month to the bank. Calculate the nominal or quoted interest rate charged on this loan (APR). Calculate the effective rate for this loan.

d. You recently used your credit card to buy a laptop for $2,500. Your credit card has an APR of 19.9%. You are paying only a minimum payment billed for $50 per month. If you do not use this card again, how long will it take you to pay off this loan? If instead you increase monthly payment to $60 per month, how many years will it take to pay off this loan?

Expert Solution

A-	total value of furniture =Using present value function in MS excel	pv(rate,nper,pmt,fv,type) rate = 15.9/12 = 1.325% nper =12*2 =24 pmt = -85 fv=0 type =0	PV(1.325%,24,-85,0,0)	$1,737.70

B-	Interest rate charged on deal -Per Month=using rate function in MS excel	rate(nper,pmt,pv,fv,type) nper =12 pmt =-770 pv =8500 fv =0 type =0	RATE(12,-770,8500,0,0)	1.31%
	Interest rate charged on deal-Per Year	(1.31*12)		15.72%

C-	nominal or quoted interest rate-Monthly	rate(nper,pmt,pv,fv,type) nper =60 pmt =-158.04 pv =12000 fv =0 type =0	RATE(60,-158.04,12000,0,0)	-0.74%
	nominal or quoted interest rate-Yearly	-.74%*12		-8.88%
	effective interest rate =(1+r/12)^n-1	(1+8.88%/12)^12-1	9.25%

D-	how long will it take you to pay off this loan in months=Using Nper function in MS excel	nper(rate,pmt,pv,fv,type) rate = 19.9/12 =1.6583% pmt =-50 pv=2500 fv =0 type =0	NPER(1.6583%,-50,2500,0,0)	107.43
	how long will it take you to pay off this loan in months=Using Nper function in MS excel			107 Months

jeff jeffy answered 2 years ago

Suppose you own a house where you live and a condo for rent. The monthly rent...

Suppose you own a house where you live and a condo for rent. The monthly rent is $1,600 and you will get it at the end of each month. Yet you have to pay maintenance fees and insurance premium. They are $600 per month in total. The property tax is proportional to the (present) value of the property. The tax rate is 0.1% per month and you pay the tax every month on the last day of each month with...

A debt of $6,500.00 is repaid in equal monthly installments over 4 years. The interest rate...

A debt of $6,500.00 is repaid in equal monthly installments over 4 years. The interest rate is 9% and compounded monthly. a. What is the size of the monthly payment? b. What will be the total cost of borrowing? c. What is the outstanding balance after 1 years? d. How much is the 30th payment is interest? P.S. i need a detailed answer please.

Question 5 Rahim operates his Furniture business from a building taken on a monthly rent of...

Question 5 Rahim operates his Furniture business from a building taken on a monthly rent of RO 4000 from Khalid since January 2018. The agreement notifies that the rent has to be paid to Khalid every three months and that it will increase every year by 5%. Rahim paid all rental dues for 2018 but at the same time informs Khalid that he is having financial difficulties and needs money to buy Furniture for his business. Khalid agrees for the...

What are potential concerns associated with obtaining furniture, appliances, and other items from a rent-to-own business?...

What are potential concerns associated with obtaining furniture, appliances, and other items from a rent-to-own business? (LO6.3) What is a “certified pre-owned” vehicle? What are the benefits and drawbacks of this type of purchase? (LO6.2)

The monthly rent for a two-bedroom apartment in a particular city is reported to be $1550....

The monthly rent for a two-bedroom apartment in a particular city is reported to be $1550. Randomly chosen 50 apartments are taken as a sample, which has a mean of $1608 and a standard deviation of $302. (a) Conduct a hypothesis test at a 0.05 level of significance if the reported rent of $1550 is plausible. Make sure to state your null and alternative hypotheses1 . (b) Construct a 95% confidence interval for the population mean of the sampled data....

Samantha enters a rent-to-own agreement for living room furniture. She will pay $ 70$70 per month...

Samantha enters a rent-to-own agreement for living room furniture. She will pay $ 70$70 per month for one year. Which of the following shows the timeline for her payments if the first payment is one month from now? A. Date (Months) 0 1 2 3 4 5 6 7 8 9 10 11 12 Cash Flows 0 negative $ 70−$70 negative $ 70−$70 negative $ 70−$70 negative $ 70−$70 negative $ 70−$70 negative $ 70−$70 negative $ 70−$70 negative $...

Glen Pool Club, Inc., has a $145,000 mortgage liability. The mortgage is payable in monthly installments...

Glen Pool Club, Inc., has a $145,000 mortgage liability. The mortgage is payable in monthly installments of $1,491, which include interest computed at an annual rate of 12 percent (1 percent monthly). a. Prepare a partial amortization table showing (1) the original balance of this loan, and (2) the allocation of the first two monthly payments between interest expense and the reduction in the mortgage’s unpaid balance. b. Prepare the journal entry to record the second monthly payment. c. Will...

Glen Pool Club, Inc., has a $147,000 mortgage liability. The mortgage is payable in monthly installments...

Glen Pool Club, Inc., has a $147,000 mortgage liability. The mortgage is payable in monthly installments of $1,512, which include interest computed at an annual rate of 12 percent (1 percent monthly). a. Prepare a partial amortization table showing (1) the original balance of this loan, and (2) the allocation of the first two monthly payments between interest expense and the reduction in the mortgage’s unpaid balance. b. Prepare the journal entry to record the second monthly payment. c. Will...

A sample of 25 values for monthly rent of two-bedroom apartments was selected from a recent...

A sample of 25 values for monthly rent of two-bedroom apartments was selected from a recent edition of the Gainsville Sun. The distribution of the 25 values is symmetric, with no outliers. The mean of this sample was $575, and you may estimate that the population standard deviation was $165. a. A group of students think the true mean rent for this type of apartment is over $650. Is there statistical evidence in the data to reject their claim? b....

The following contingency table shows the number of two-bedroom apartments grouped by monthly rent and location....

The following contingency table shows the number of two-bedroom apartments grouped by monthly rent and location. Monthly Rent York Lancaster Dover Total $600 to under $700 6 15 9 30 $700 to under $800 30 21 24 75 $800 to under $900 15 18 12 45 Total 51 54 45 150 The probability that a randomly selected apartment from this group has a monthly rental from $700 to under $800 or is located in Lancaster is ________. 0.59 0.72 0.85 0.63

Question