Makes minimum monthly payment and makes other charges

Assignment Help Financial Management
Reference no: EM13894202

Simon recently received a credit card with an 18% nominal interest rate. With the card, he purchased an Amazon Kindle for $350. The minimum payment on the card is only $10 per month.

a. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card. Round to the nearest month.

b. If Simon makes monthly payment of $30, how many months will it be before he pays off the card. Round to the nearest month.

c. How much more in total payments will Simon make under the $10-a-month plan than under the $30-a-month plan? Make sure you use three decimal places for N.

Reference no: EM13894202

Questions Cloud

Use the bootstrap method to calculate all zero rates : The price of a 1-year zero is $96.00, the price of a 2-year 10% coupon bond is $107.30 and the price of a 3-year 8% coupon bond is $102.25. Use the bootstrap method to calculate all zero rates.
What is the dollar amount of each payment jan receive : Jan sold her house on December 31 and took a $10,000 mortgage as part of the payment. The 10-year mortgage has a 10% nominal interest rate, but it calls for semiannual payments beginning next June 30. What is the dollar amount of each payment Jan rec..
Currently uses zero-debt financing : Seattle Health Plans currently uses zero-debt financing. Its operating income (EBIT) is $1 million, and it pays taxes at a 40 percent rate. It has $5 million in assets and, because it is all-equity financed, $5 million in equity.
Values using the equations and then financial calculator : Find the following values using the equations and then a financial calculator. Compounding/discounting occurs annually.
Makes minimum monthly payment and makes other charges : Simon recently received a credit card with an 18% nominal interest rate. With the card, he purchased an Amazon Kindle for $350. The minimum payment on the card is only $10 per month. If Simon makes the minimum monthly payment and makes no other charg..
Find the present values of these ordinary annuities : Find the present values of these ordinary annuities. Discounting occurs once a year. a. $400 per year for 10 years at 10%.
What was charge for depreciation and amortization : Little Book Company recently reported an EBITDA of $5 million and net income of $1.2 million. It had $1 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization?
What is the MUC of dumping a half ton load of waste : A local landfill currently charges $100 per half ton load of waste to dump. The marginal costs to the landfill of operating the dump are about $60 per half ton load of waste. Assuming the landfill pricing is dynamically efficient, what is the MUC of ..

Reviews

Write a Review

Financial Management Questions & Answers

  Interest rate parity-what is six-month forward exchange rate

Six-month T-bills have a nominal rate of 4%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 2%. In the spot exchange market, 1 yen equals $0.005. If interest rate parity holds, what is the 6-month forward exchange ra..

  Disadvantage of the security market line

Which of the following is most accurate regarding the advantages and disadvantages of the methods used to compute a company’s cost of equity? A disadvantage of the Security Market Line (SML) is that it does not explicitly consider risk

  Corporation is expected to pay the dividends

Far Side Corporation is expected to pay the following dividends over the next four years: $10, $8, $6, and $4. Afterward, the company pledges to maintain a constant 4 percent growth rate in dividends forever. If the required return on the stock is 14..

  What is the length of the days sales in inventory

Scribble, Inc. has sales of $81,000 and cost of goods sold of $65,000. The firm had a beginning inventory of $11,000 and an ending inventory of $13,000. What is the length of the days' sales in inventory?

  Calculate current cost of equity-value of equity-price share

Copper company CCT has three million common shares outstanding and perpetual debt with a market value of $30 million. Its interest rate is 8%, and its corporate tax rate is 40%. Its levered beta is 1.2. The risk-free rate is 3% and the market portfol..

  Project capital budgeting analysisthe sl energy group is

project capital budgeting analysisthe sl energy group is planning a new investment project which is expected to yield

  What was the dividend yield for the year

The common stock of Acadia, Inc., sold for $32.90 at the beginning of the year and $33.12 at the end of the year. During the year, the stock paid $1.10 in dividends. What was the dividend yield for the year?

  Calculate the dividend payout ratio

Johnson Products earned $3.10 per share last year and it paid out $.75 dividend. The company’s ROE is 16%. Calculate the dividend payout ratio; Calculate the sustainable growth rate of the company.

  Compute the eac for both machines

You are evaluating two different silicon wafer milling machines. The Techron I costs $261,000, has a three-year life, and has pretax operating costs of $70,000 per year. use straight-line depreciation to zero over the project’s life and assume a salv..

  Nowc and dcf analysis

Calculate the required investment in NOWC for the three years of the project.  Use these estimates of NOWC to calculate the Cash Flow from NOWC.

  Determine the present value of the bonds cash flows

The Garcia Company’s bonds have a face value of $1,000, will mature in 10 years, and carry a coupon rate of 16 percent. Assume interest payments are made semi annually. Determine the present value of the bond’s cash flows if the required rate of retu..

  What is the amount of the firms disbursement float

Decatur Arts Center writes 158 checks a day for an average amount of $211 each. These checks generally clear the bank 3.5 days after they are written. In addition, the firm generally receives an average of $50,000 a day in checks. The checks that are..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd