Jean and Walter Pereira Financed the Addition of a Swimming

question 69

Essay

Jean and Walter Pereira financed the addition of a swimming pool using a $24,000 home improvement loan from their bank. Monthly payments of $500 (except for a smaller final payment) include interest at 5.2% compounded semi-annually. Construct a partial amortization schedule showing details of the first two payments, Payments 28 and 29, and the last two payments. What total interest will the Pereiras pay over the life of the loan?

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Definitions:

Total Assets

The sum of all owned resources (assets) that have economic value which a company or individual possesses.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects revenue from its customers by comparing net credit sales to average accounts receivable.

Liquidity

A measure of how quickly and easily an asset can be converted into cash without significantly affecting its price.

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers for sales made on credit.