Question

In: Finance

Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is...

Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is not lost: You just received an offer in the mail to transfer your $12,000 balance from your current credit card, which charges an annual rate of 19.8 percent, to a new credit card charging a rate of 10.4 percent. How much faster could you pay the loan off by making your planned monthly payments of $225 with the new card? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) What if there was a 2 percent fee charged on any balances transferred? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Solutions

Expert Solution

PART 1: It will be paid 57.67 months faster.

2: It will be paid off 55.66 months faster.

PART 1 Original Card New Card
Amount due 12000 12000
Rate 19.80% 10.40%
Monthly payments 225 225
Time taken 129.56 71.88
Difference 57.67
PART 2 Original Card New Card
Amount due 12000 12240
Rate 19.80% 10.40%
Monthly payments 225 225
Time taken 129.56 73.89
Difference 55.66

WORKINGS


Related Solutions

Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is...
Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is not lost, because you just received an offer in the mail to transfer your $12,600 balance from your current credit card, which charges an annual rate of 20.4 percent, to a new credit card charging a rate of 11 percent. (a) How much faster could you pay the loan off by making your planned monthly payments of $255 with the new card? (Do not...
Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is...
Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is not lost, because you just received an offer in the mail to transfer your $13,800 balance from your current credit card, which charges an annual rate of 21.6 percent, to a new credit card charging a rate of 12.2 percent.    How much faster could you pay the loan off by making your planned monthly payments of $315 with the new card? (Do not...
1.Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is...
1.Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is not lost: You just received an offer in the mail to transfer your $13,500 balance from your current credit card,which charges an annual rate of 21.3 percent, to a new credit card charging a rate of 11.9 percent.    How much faster could you pay the loan off by making your planned monthly payments of $300 with the new card? (Do not round intermediate...
Your round-the-world vacation ran over budget. But you’re in luck. You just received an offer to...
Your round-the-world vacation ran over budget. But you’re in luck. You just received an offer to transfer your $15,000 balance from your current credit card, which charges an annual rate of 24 percent, to a new credit card charging 18 percent. How much faster could you pay off the loan by making your planned monthly payments of $500 with the new card? Note: assume monthly compounding.
As we all know Cousin Eddie of Christmas vacation loved to hunt and eat squirrels untill...
As we all know Cousin Eddie of Christmas vacation loved to hunt and eat squirrels untill he learned that they were high in cholesterol. So now, he just plinks peices of 2x4 blocks off the back fence for fun, using his trusty .22 long rifle (.22LR). To prevent a through and through shot, he uses a 40 grain (2.60 grams; .0026kg) bullet having a muzzle velocity of 270 m/s. He shoots into a 3/4 lb. (.340kg) peice of 2x4 sittin...
By some estimates, thirty-­‐percent (30%) of all students in Groningen go on ski vacation each year....
By some estimates, thirty-­‐percent (30%) of all students in Groningen go on ski vacation each year. Out of a random sample of 300 students, what is the approximate probability that more than 100 of them went to ski this year? (Use the normal approximation) And: Oscar is getting married in Brazil where it rains only 1% of the time. Unfortunately, the weather expert has predicted rain for tomorrow. On a given day, there is a 9% chance that the weather...
Bill is an aging snowboard instructor at a local ski resort. All winter, he takes over...
Bill is an aging snowboard instructor at a local ski resort. All winter, he takes over the counter pain medication to deal with his aching joints. Each summer, he moves home with his parents and takes a part time job making minimum wage. This summer, he got qualified for and enrolled into state government subsidized health insurance. Now he plans to undergo arthroscopic surgery by the end of the summer to repair his knee. Use the terms insurance, third party...
Your budget is such that by spending all of your income, you could afford 12 pizzas...
Your budget is such that by spending all of your income, you could afford 12 pizzas or 36 liters of Beverage per week. Draw your budget line, placing Beverages (in liters) on the vertical axis? Write out a budget equation that would generate this budget line? Is there only one budget equation that will work? What is the slope of the budget line? If you want to use your budget to buy an additional pizza, how many less Beverages will...
Build a capital budget for your lab as if you were the new manager taking over....
Build a capital budget for your lab as if you were the new manager taking over. List the equipment that you would like to purchase and the time frame in which you'd like to purchase. What are the expected costs? Remember, costs associated with purchasing equipment are not solely the equipment, but installation, time, training, SOP writing, etc must be taken into account. Be as detailed as possible.
FV and PV of Annuities a) After carefully going over your budget, you have determined you...
FV and PV of Annuities a) After carefully going over your budget, you have determined you can afford to pay $632 per month toward a new sports car. You call up your local bank and find out that the going rate is 1 percent per month for 48 months. How much can you borrow? b) Suppose you begin saving for your retirement by depositing $2,000 per year in an IRA. If the interest rate is 7.5%, how much will you...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT