Im Struggling with this assignment here. Would like help ASAP.
Consider following situation..
You are going to buy this laptop at $1294.00 plus HST. You can also pay $50 a month for 30 months with down payment of $100. Compare following 3 scenarios using spreadsheets to calcuate how much you will pay.
1st Scenario:
Pay Cash
2nd Scenario:
Do monthly payment plan and save remaining money in savings account with interest rate of 1.5%. You're going to withdraw the amount frm this savings account to make ur monthly payment till all of its gone.
3rd Scenario:
Pay with Visa credit card at yearly interest rate of 18%. 30 days after purchase, you make your first payment. Interest starts 30 days after purchase. U will make amount back over 4 months.
Use May 1st as purchase date.
So confused about this assignment.
For the headings. I think I am supposed to have Month, Principal, Payment, To Interest, To Principal, and Principal Left.
I really don't get this:\
No one has answered this question yet.
I can help you with this assignment. It seems like you need to compare three different scenarios for purchasing the laptop. Let's go through each scenario step by step and calculate the total amount you will pay in each case.
First, let's consider the situation when you pay cash. In this scenario, you will pay the full amount of $1294.00 plus HST. Therefore, the total amount you will pay is $1294.00 + HST.
Secondly, let's consider the monthly payment plan. You will pay $50 a month for 30 months with a down payment of $100. To calculate the total amount you will pay, you can create a spreadsheet with the following headings:
- Month: This represents the number of months since your purchase.
- Principal: This is the starting amount you owe before any payments.
- Payment: This is the monthly payment amount.
- To Interest: This is the portion of your payment that goes toward interest.
- To Principal: This is the portion of your payment that goes toward paying off the principal.
- Principal Left: This is the remaining principal amount after each payment.
To fill in the spreadsheet, calculate the monthly interest rate first. Divide the annual interest rate by 12 (since there are 12 months in a year). In this case, the annual interest rate is 1.5%, so the monthly interest rate is 1.5% / 12 = 0.125%.
Start with the principal amount of $1294.00 minus the down payment of $100, which gives you $1194.00 as the starting principal. Subtract the interest portion from each monthly payment to get the principal portion.
For example, in the first month, the interest portion is (0.125% × principal). Subtract this interest portion from the monthly payment to get the principal portion. Update the principal left by subtracting the principal portion from the previous month's principal left.
Continue this calculation for each month until the principal left becomes zero. The total amount you will pay is the sum of all your payments plus the down payment.
Lastly, let's consider the payment with a Visa credit card. The interest rate is 18% per year, and you will make four equal monthly payments starting 30 days after the purchase. Create a new spreadsheet similar to the previous one but with only four rows (representing the four months).
Start with the principal amount of $1294.00 and calculate the monthly interest rate the same way as before (18% / 12 = 1.5%). In this scenario, the interest starts accumulating after 30 days, so the first month's interest will be (1.5% × principal × (30 days / 365 days)).
Calculate the total payment amount by dividing the remaining principal into four equal parts. For example, if the principal left after 30 days is $1000, then each monthly payment will be $1000 / 4 = $250.
Again, subtract the interest portion from each monthly payment to get the principal portion, and update the principal left accordingly. The total amount you will pay is the sum of all your payments.
I hope this explanation helps you understand how to approach this assignment. If you need further assistance or have any specific questions, feel free to ask.