Freyensee just acquired office furniture that had a list price of $400,000. The furniture store said that it would finance the entire price at 0 percent interest by letting the company make eight quarterly payments of $50,000 starting three months from the date of purchase.

A. If Freyensee Company can borrow money at 8 percent, what is the cost of the office furniture?

B. What is the cost of the office furniture if Freyensee Company usually borrows money at 6 percent?

C. What is the cost of the office furniture if Freyensee Company agrees to make four semiannual payments of $100,000 each if it usually borrows money at 8 percent?

Tara Storey can afford car payments of $400 per month for five years. The interest rate on car loans is 6 percent.

A. How much can she spend for a car?

B. How much can she spend for a car if she could get an interest rate of 4 percent?

C. How would your answer to part A change if she could make a $2,000 down payment?

D. How would your answer to part B change if she could make a $2,000 down payment?

## Solution:

##
Looking for help with your homework?

Grab a 30% Discount and Get your paper done!

30% OFF

Turnitin Report

Formatting

Title Page

Citation

Place an Order