1. A local finance company will loan $8,000 to a home-owner. It is to be repaid in 24 monthly payment of $498 each. The first payment is due 30 days after the $8,000 is received. What interest rate per month are they charging?
2. Callaghan Motors’ bonds have 5 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 10.50%, and the yield to maturity is 20%. What is the bond’s current market price?
3. Beauty Aids has an average collection period of 8.4 days and annual credit sales of $937,800. What is the average investment in accounts receivable as shown on the balance sheet? Assume a 365-day year.
A) $18,850
B) $20,375
C) $22,506
D) $18,906
E) $21,582