Stellar Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because...
Stellar Inc. developed a new sales gimmick to help sell its
inventory of new automobiles. Because many new car buyers need
financing, Stellar offered a low downpayment and low car payments
for the first year after purchase. It believes that this promotion
will bring in some new buyers.
On January 1, 2020, a customer purchased a new $32,600 automobile,
making a downpayment of $600. The customer signed a note indicating
that the annual rate of interest would be 12% and that quarterly
payments would be made over 3 years. For the first year, Stellar
required a $400 quarterly payment to be made on April 1, July 1,
October 1, and January 1, 2021. After this one-year period, the
customer was required to make regular quarterly payments that would
pay off the loan as of January 1, 2023.
Prepare a note amortization schedule for the first year. (Round answers to 0 decimal places, e.g. 38,548.)
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Carrying |
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| 1/1/20 | $ | $ | $ | $ | ||||
| 4/1/20 | ||||||||
| 7/1/20 | ||||||||
| 10/1/20 | ||||||||
| 1/1/21 |
Indicate the amount the customer owes on the contract at the end of the first year. (Round answer to 0 decimal places, e.g. 38,548.)
| The customer owes on the contract at the end of the first year | $ |
Compute the amount of the new quarterly payments. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)
| The new quarterly payments | $ |
Prepare a note amortization schedule for these new payments for the next 2 years
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|
|
|
Carrying |
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| 1/1/21 | $ | $ | $ | $ | ||||
| 4/1/21 | ||||||||
| 7/1/21 | ||||||||
| 10/1/21 | ||||||||
| 1/1/22 | ||||||||
| 4/1/22 | ||||||||
| 7/1/22 | ||||||||
| 10/1/22 | ||||||||
| 1/1/23 |
Homework Answers
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