Giovando, Lindstrom & Co

question 39

Short Answer

Giovando, Lindstrom & Co. obtained a $6,000 demand loan at prime plus 1.5% on April 1 to purchase new office furniture. The company agreed to fixed monthly payments of $1,000 on the first of each month, beginning May 1. Calculate the total interest charges over the life of the loan if the prime rate started at 3.75% on April 1, decreased to 3.5% effective June 7, and returned to 3.75% on August 27. Present a repayment schedule in support of your answer.

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Definitions:

Emotional Reactions

The spontaneous and instinctive responses we have towards certain stimuli, influenced by our emotions.

Behavioral Component

A part of a psychological model that deals with actions or reactions of an organism in response to external or internal stimuli.

Emotion

A complex state of feeling that results in physical and psychological changes that influence thought and behavior.

Affect

Encompasses the experience of feeling or emotion, which can influence thoughts and behaviors.