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1. Variable Interest Rates Jodie is a medical student who has accumulated 24,000S of credit card...
1. Variable Interest Rates Jodie is a medical student who has accumulated 24,000$ of credit card debt on numerous credit cards. She is looking to consolidate her debt. On 1/1/2010, she visits her bank and she is offered the following debt consolidation plan: the bank will lend her 24,000$ to pay off al1 her outstanding credit card balances on that day, in return for a fixed payment of 11,520S on 1/1/2011, plus a payment of 8,000*(1+0.01+Prime Rate on 1/1/2012)S on...
1. Variable Interest Rates Jodie is a medical student who has accumulated 24,000$ of credit card debt on numerous she is offered the following debt consolidation plan: the bank will lend her 24,000s to 1/1/2012, and a payment of 8,000*(1+0.01+Prime Rate on 1/1/2013)S on 1/1/2013. It is the yearly rate for loans to prime borrowers, that is, borrowers who will almost credit cards. She is looking to consolidate her debt. On 1 /1/2010, she visits her bank and pay offall...
1. Variable Interest Rates Jodie is a medical student who has accumulated 24,000$ of credit card debt on numerous she is offered the following debt consolidation plan: the bank will lend her 24,000s to 1/1/2012, and a payment of 8,000*(1+0.01+Prime Rate on 1/1/2013)S on 1/1/2013. It is the yearly rate for loans to prime borrowers, that is, borrowers who will almost credit cards. She is looking to consolidate her debt. On 1 /1/2010, she visits her bank and pay offall...
21. Stacey has a $8,000 balance on her credit card that has an interest rate of 21%, compounded monthly. (a) If she decides to pay it off over 5 years with equal monthly payments, how much should each payment be? (b) How much interest will Stacey pay to the credit card company? (c) If instead she wants to completely pay off her debt after 3 years (1.6. 2 years early), what lump sum payment must she make?
The problem: Monica's current debt consists of three types of loans: a bank card, an auto loan, and a department store card. She owes a total of $25,000 and her monthly payments sum to $549.61. The amount she owes, the monthly payment, and the interest rates appear in the table below: Loan Type Bank Card Auto Loan Department Store Card TOTALS Loan Amount Annual Percentage rate, APR (Current Debt) Monthly Payment 18% $12,000 $243.85 5.5% $11,500 $257.88 15% R $...
Jenna is considering paying off her current credit card bill with a 2-year loan from her bank. She has stopped using the card and is paying $100 per month that will pay off the total balance in 2 years. The bank charges an upfront $500 fee to make the loan but will lower her monthly payment to $50 per month. Jenna is evaluating the loan using the payback period method with a 1-year payback period as the goal. Should she...
Part 2: Credit Cards Another type of personal loan is a credit card. A financial institution allows you to charge a purchase to your account, and you are required to pay the financial institution at a later time. As with other loans, credit cards charge interest. Interest rates can range from 3% - 22%. When you are paying for debt on a credit card, the financial institution will require a minimum balance be paid each month. The higher the interest rate that is charged...
The problem: Monica's current debt consists of three types of loans: a bank card, an auto loan and a department store card. She owes a total of $25,000 and her monthly payments sum to $549.61.The amount she owes, the monthly payment and the interest rates appear in the table below: Loan Type Annual Percentage rate, APR Loan Amount Monthly Payment Current Debt) S12,000 $11,500 S 1,500 $25,000 Bank Card Auto Loan 18% 5.5% $243.85 $257.88 Department Store Card | 15%...
1. Why are rates on credit card loans generally higher than rates on car loans? 2. Metrobank offers one-year loans with a 6.5 percent stated or base rate, charges a 0.35 percent loan origination fee, imposes an 18 percent compensating balance requirement, and must pay an 12 percent reserve requirement to the Federal Reserve. The loans typically are repaid at maturity. a) If the risk premium for a given customer is 2.25 percent, what is the simple promised interest return...
22.) A credit card has a stated interest rate of 13.3 percent. What is the APR if interest is compounded monthly? Charming Charlies charges a daily rate of 0.03 percent (.03% or .0003) on its store credit cards. What interest rate is the company required by law to report to potential customers? Charming Charlies charges a daily rate of 0.03 percent (.03% or .0003) on its store credit cards. What is the effective annual rate it charges its customers? Curtis...