Carmen's Beauty Salon has estimated monthly financing requirements for the next six months as follows: January...

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Carmens Beauty Salon has estimated monthly financing requirements for the next six months as follows: January February March

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Answer 1

Answer #1

Part a
Carmen's Beauty Salon
Short-term Financing
Col I	Col II	Col III	Col IV	Col V(Col III*Col IV)
Month	Annual Rate	Monthly Rate(Annual rate/12)	Amount Fiananced	Monthly Interest
January	5.00%	0.42%	$8,600	$36
February	6.00%	0.50%	$2,600	$13
March	9.00%	0.75%	$3,600	$27
April	12.00%	1.00%	$8,600	$86
May	12.00%	1.00%	$9,600	$96
June	12.00%	1.00%	$4,600	$46
Total Interest Payments				$304


Part b.1
Carmen's Beauty Salon
Short-term Financing
Col I	Col II	Col III	Col IV	Col V(Col III*Col IV)
Month	Annual Rate	Monthly Rate(Annual rate/12)	Amount Fiananced	Monthly Interest
January	12.00%	1.00%	$8,600	$86
February	12.00%	1.00%	$2,600	$26
March	12.00%	1.00%	$3,600	$36
April	12.00%	1.00%	$8,600	$86
May	12.00%	1.00%	$9,600	$96
June	12.00%	1.00%	$4,600	$46
Total Interest Payments				$376


Part b.2:-It would be larger under the long-term financing

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Answer 2

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