SportZ Ltd. purchases materials and services from various vendors. Money has bee

Question

SportZ Ltd. purchases materials and services from various vendors. Money has been 'r rowed from the Bank of Alberta. Payments to the vendors and the bank are being per annum. SportZ has invoices for materials purchased from Platinum Steel Inc. The invokes are for $4242 due 60 days ago. $12 567 due in 30 days, and $18 451 due in 140 days. If SportZ pays all of these invoices today, how much cash is needed. Money is worth 6% per annum. Bank of Alberta loan payments of $11 000 due 35 days ago and $16 000 due in 68 days arc to be replaced by a payment of S6000 today and a further payment in 90 days. If interest on these loans is 7.2% per annum, what is the size of the final payment? Prairie Plastics Ltd. is owed two payments of $18 000 due in 60 days and $16 000 due in 120 days. Instead. SportZ has negotiated a new payment agreement in which three equal payments arc to be made in 75 days, 100 days, and 200 days. If interest of 9% is charged, what is the size of the equal payments? Creative Inc.. a design company, has sent SportZ an invoicc for services provided, in the amount of $15 000, due today. Alternatively, they will accept payment of $15 150 in 50 days. What interest rate is being charged? A 5% promissory note for $10 000 was issued 183 days ago. How much cash is needed today to pay the note? SportZ has secured a line of credit with the Bank of Alberta. The following transactions were made for the last month. The account receives daily interest of 1.5% p.a. on positive balances and pays daily interest of 8% p.a. on negative balances. The limit on the line of credit is $10 000. Overdraft interest of 19% p.a. is charged on the daily amount exceeding the line of credit limit. For each transaction causing an overdraft or adding to an overdraft, a service charge of $10 is applied. Calculate the interest, overdraft interest, service charges, and the month-end balance for the line of credit.

Explanation / Answer

4.a,- value of the promisory note before 183 days=$10000

intrest for 183 days @5%p.a($10000*5/100*183/365)=$250.68

total value of the promisory note today=$10250.68

3.a- bill drawn 60 days ago=$4242

todays value ($4242+$4242*6/100*60/365)=$4283.84

present value of the bill $12567 due in 30 days @6%{$12567-(6%/365*30)/100*12567}=12505.42

present value of the bill $18451 due in 140 days @6%{$18451-(6%/365*140)/100*18451}=18026.63

total cash needee today=$4283.84+$12505.42+$18026.63=34815.89

3.d- intrtest charged for 50 days on$15000=$150

intrest chargeble for 365 days 0n$15000=$150/50*365=$1095

so intrest %charged =$1095/15000*100=7.3%

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