Question

Ed wants to borrow $20,000 from a bank to open a small gym. Three banks charge different interest rates. To help decide the best loan option, Ed wants to know the percent profit he will make each month.

Part A
The cost to run the gym each month is $5,000. Find Ed’s total monthly expenses for each loan option.

Bank
Repayment Period
Average Monthly Sales
Monthly Loan Payment
Total Monthly Expenses
First
1 year
$7,500
$1,792
?
City
1 year
$7,500
$1,803
?
Star
1 year
$7,500
$1,817
?

Answer 1

yea

Explanation:

Answer 2

(B)Calculate the estimated percent profit. Explain how you found the estimated percent profit.

Answer:

See Explanation

Explanation:

PART A

Ed's Total Monthly Expense for each Loan is given below:

`\left|\begin{array}cBank&First&City&Star\\-------&------&------&-----\\$Repayment Period&1 \:Year&1\: Year&1 \:Year\\$Average Monthly Sales&$\$7,500&$\$7,500&$\$7,500\\$Monthly Loan Payment&$\$1792&$\$1803&$\$1817\\$Total Monthly Expenses&1792+5000&1803+5000&1817+5000\\-----&----&----&----\\& \$6792&\$6803&\$6817\\\end{array}\right|`

PART B

The percentage profit for each option is calculated below.

To calculate the percentage profit:

• Subtract the total monthly expense from the average monthly sales.
• Divide the result by 7500
• Multiply by 100.