A bookstore offers you the following deal: you pay $33 today (in January) and you get...

A bookstore offers you the following deal: you pay $33 today (in January) and you get 8%

off the price of everything you purchase in December (for simplicity assume exactly 12

months from now). If your savings account earns 3.08% APR (compounded monthly), how

much do you have to buy in December to just break even on the offer?

Expert Solution

The amount you have to buy in December = ($33 / 8%) * (1 + 3.08% / 12)^12 

= $412.50 * 1.0312385

= $425.39


The amount you have to buy in December = $425.39

jeff jeffy answered 2 years ago

A bookstore offers you the following deal: you pay $31 today (in January) and you get...

A bookstore offers you the following deal: you pay $31 today (in January) and you get 5% off the price of everything you purchase in December (for simplicity assume exactly 12 months from now). If your savings account earns 4.50% APR (compounded monthly), how much do you have to buy in December to just break even on the offer?

1. A bookstore offers you the following deal: you pay $36 today(in January) and you...

1. A bookstore offers you the following deal: you pay $36 today (in January) and you get 5%off the price of everything you purchase in December (for simplicity assume exactly 12months from now). If your savings account earns 4.03% APR (compounded monthly), howmuch do you have to buy in December to just break even on the offer?2.You expect that you will need to replace your furnace in 3 years at a cost of $16,944. Howmuch must you save, each month...

You just had your twentieth birthday. A salesmen offers you the following deal: "Pay our company...

You just had your twentieth birthday. A salesmen offers you the following deal: "Pay our company $75 per month for 20 years starting in one month and when you retire, we'll guarantee you an income of $4,000 per month for 25 years starting one month after your 65th birthday." What is the net present value of this deal if the interest rate is 9%/year compounded monthly?

Your rich aunt offers you the choice of 3 pay-outs today Choice 1 : $1000 paid...

Your rich aunt offers you the choice of 3 pay-outs today Choice 1 : $1000 paid every year for 5 years, with the first payment to be received at the end of year 3 Choice 2 : $300 paid today Choice 3 : $80 paid at the end of each month for 5 years, with the first payment to be received in a month (a) What is the effective annual interest rate would make you indifferent between choice 2 and...

While shopping for a car loan, you get the following offers: Solid Savings & Loan is...

While shopping for a car loan, you get the following offers: Solid Savings & Loan is willing to loan you $10,000 at 5% interest for 4 years. Fifth Federal Bank & Trust will loan you the $10,000 at 3% interest for 3 years. Both require monthly payments. You can afford to pay $250 per month. Which loan, if either, can you take? Solid Savings & Loan Fifth Federal Bank & Trust neither loan

Friendly's Quick Loans, Inc., offers you $7.50 today but you must repay $9.35 when you get your paycheck in one week (or else).

Friendly's Quick Loans, Inc., offers you $7.50 today but you must repay $9.35 when you get your paycheck in one week (or else).Requirement 1:If you were brave enough to ask, what APR would Friendly's say you were paying?(Round answer as directed, but do not use rounded numbers in intermediate calculations. Enter your answer as a percent rounded to 2 decimal places (e.g.. 32.16).)Annual percentage rate _________%

You are offered a deal for purchasing a vehicle that requires you to pay $200 per...

You are offered a deal for purchasing a vehicle that requires you to pay $200 per month for the first year and payments of $400 per month during the second year. The APR is 18% and payments begin in one month. What is the present value of this 2-year loan?

How much would you be willing to pay today for an investment that promises to pay...

How much would you be willing to pay today for an investment that promises to pay you pay $26,000 in 35 years if your required return on the investment is 9% per year?

Have you ever had to deal with a virus? What steps did you take to get...

Have you ever had to deal with a virus? What steps did you take to get rid of the virus? Could you have avoided infection in the first place? What did you learn from the experience?

You are buying a house and the mortgage company offers to let you pay a "point"...

You are buying a house and the mortgage company offers to let you pay a "point" (1.0 % of the total amount of the loan) to reduce your APR from 6.24% to 5.99% on your $409,000, 30-year mortgage with monthly payments. If you plan to be in the house for at least five years, should you do it? (Note: Be careful not to round any intermediate steps less than six decimal places.) The monthly mortgage payment at 6.24% APR is...

Question