10,000 bank loan in 10 equal payments at a 10% effective annual interest rate. Immediately after her third payment she borrows another P5000, also at 10%. When she borrows the P5,000, she talks the banker into letting her repay the remaining debt of the first loan and the entire amount of the second loan in 12 equal annual payments. The first

Q: Lauren plans to deposit $5000 into a bank account at the beginning of next month and $225/month into…

A: Annuity refers to series of annual payment which is paid or received at start or end of specific…

Q: A man borrowed 200,000 from his friend and agreed to pay after 6 years at an interest rate of 10%…

A: Given: Amount Borrowed: 200,000 Loan tenure in years: 6 Loan Interest Rate: 10% Annual Deposit…

Q: In return for a loan, Mr. Domingo promises to pay P15,000 at the end of each 3 months for two years.…

A: Amount repaid quarterly is P15,000 Time period is two years Interest rate s 10% converted quarterly…

Q: Nine  years  from  now,  Sam  wants  to  have  an  amount  available  to  deposit  into  an  account…

A: ANSWER GIVEN ON THE NEXT SHEET

Q: In order to have 95.000€ in 20 years, mrs Rossi decides to deposit an annual constant ordinary…

A: Constant Ordinary instalment is also known as Equated monthly instalment, is a debt instalment that…

Q: Suppose you loan $10,000 for 1 year to an individual who agrees to pay you interest at a compound…

A: Interest charged on the principal amount and the interest accrued is known as Compound Interest. It…

Q: A person agreed with a bank to deposit an amount of 500 dinars at the end of each year starting from…

A: The compound value of money can be depicted as the amount of interest generated on interest earned…

Q: Rosel applied for a cash loan with an amount of P100,000.00 to be paid using ordinary simple…

A: Loan amount (L) = P 100000 Simple interest rate (r) = 6.5% n = 2 years 5 months = 29 months

Q: Gladys borrows ₱ 400,000.00 at an interest rate of 4% per year compounded semi- annually. She agreed…

A: Value after 2 years   FV = PV* (1 + r / n)nt Where, PV = Present value FV = Future value r = Rate…

Q: If Rochelle obtained a business loan of $205,000.00 at 4.67% compounded semi-annually, how much…

A: Business loan = $205,000.00 Interest Rate = 4.67% compounded semi-annually Time Period = 30 Years

Q: A businessman wants to borrow P1,000,000 from a bank that charges a rate of interest of 12%…

A: The given problem can be solved using PMT formula in excel. PMT formula computes payment /…

Q: A man deposits her annual bonus into a savings account that pays 8% interest compoundedannually. The…

A: In this question we need to calculate the amount in the saving account immediately after the fifth…

Q: Margo borrows $900, agreeing to pay it back with 5% annual interest after 10 months. How much…

A: Interest is the amount that an investor receives on the principle amount over certain period of…

Q: Mr. A wants to receive a consistent amount from a bank that offers 60% nterest to be compounded…

A: Interest Rate = 6% Compounded Annually First Withdrawal after 5 years Time Period for years (T) = 4…

Q: How much of the original principal is still unpaid after he has made the 8th payment?

A: Get the annuity first using P = 600000,i =12%= 0.12 , n = 15 P= A*(1-(1+i)^-n)/i…

Q: Your grandmother set up an annuity, in which she will receive a monthly payment from the bank of…

A: The present value of an annuity is the present value of a series of cash flows at a certain rate of…

Q: Marcus is expected to settle a loan by paying $6,000. What amount should he pay if he decides to…

A: Present Value refers to the discounted value of a single cash flow or multiple cash flows today…

Q: Ms. C took a loan of $150,000 at a rate of 7 percent. She can pay equal installments of $25,000 at…

A: The number of years over which she can repay the loan amount can be calculated using the NPER…

Q: Johnny has a loan for $50,000 at a rate of i(4) = 8% on which he makes quarterly payments of $2,000.…

A: Amount of deposit every 3 months: $500 starting from today at a rate of interest of 1% effectively.…

Q: To help finance the purchase of a house and lot, a couple borrows P350,000. The loan is to be repaid…

A: Given Information :  Amount borrowed = P350,000 Number of years = 8 Annual interest rate = 15%

Q: Suat opens a deposit account in a bank by depositing 10,000 TL. In addition, he will deposit 6,000…

A: Initial Deposit = 10,000 Deposit after one year = 6000 Deposit after two years = 4000 Value in…

Q: sara wants to deposit equal payments in BDO at the end of every month so that her daughter, Duchess,…

A: Here, Withdrawal Amount on 18th Birthday is 1,000,000 pesos First deposit made after one month of…

Q: Mrs. Dollie availed a cash loan that gave her an option to pay Php10,000 monthly for one year. The…

A: An annuity is a stream of cash flows wherein an equal payment is paid at the end of every period.

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A: House cash price (CP) = $ 5,000,000 Period = 5 Years Total number of monthly payments (m) = 5*12 =…

Q: Calculate monthly payments to NHT if payments are made at the end of each month.  B. Compute annual…

A: Amortization is the fall in the value of intangible asset over its useful life. It is recorded under…

Q: Brandt receives a loan of S10000 from a bank at an annual interest rate of 6% compounded monthly to…

A: Loan is contract between lender and borrower where lender provide funds to borrower that is repaid…

Q: To pay for your child's education, you wish to have accumulated P15,000 at the end of 15 years. To…

A: Future value (F) = P15,000 Time period (n) = 15 years Rate of interest = 6% (compounded annually)

Q: To help finance the purchase of a house and lot , a couple borrows P350,000. The loan is to be…

A: The interest rate is the proportion of a loan that is charged as interest to the borrower. It is the…

Q: t on the account is 10% compounded semi-annually, for how long does Laura have to deposit the money?…

A: The answer has been mentioned below.

Q: Patricia promises to pay Patsy $2400.00 plus interest at 8% in one year. After 3 months passed, she…

A: Time has been valuable in all aspects but in terms of finance, time has a money value. The worth of…

Q: Tony Sanchez plans to retire and to withdraw 10 annual withdrawals that will start at P60,000 at the…

A: The initial deposit will be the sum of the present value of all the withdrawals in the future.

Q: Janie deposits $10,000 in the bank today. Starting 3 years from now, she makes equal withdrawals of…

A: The amount at the end of 10 years will depend upon the future values of the deposits and the…

Q: its, with the first deposit one year from now and succeeding deposits at 2-year intervals, so that…

A: In this we have to calculate the present value of future withdrawals and calculate the deposit…

Q: İhsan wants to pay the 50,000 TL loan he received from the bank in annual installments of 2,500 TL…

A: The loan refers to the fund provided by the lender to the borrower at a certain interest rate for a…

Q: Mr. Ramos buys a house and lot that cost P450,000. He pays P75,000 as down payment and promises to…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Juan owes $10,000 to a friend who is charging him simple interest of 3.50% p.a. He is required to…

A: Loan amount = $10,000 Simple interest rate = 0.035 Loan period = 4 months Lets assume equal payment…

Q: Ria buys a two-year-old Honda from a car dealer for P450,000. She puts P150,000 down and finances…

A: Equated monthly installments(EMI) is the equally divided monthly installments that outgoes to clear…

Q: An individual wants to have 1,000,000 AED in 10 years. Suppose she will pay no taxes at the end of…

A: According to the question, an individual wants 1,000,0000 AED in 10 years i.e. the amount of…

Q: month. If the bank pays 0.250% compounded monthly, how much will her money be at the end of 6 years?…

A: Note: It is a case where the number of questions asked is more than one and the question 5 is…

Q: Cesar Moreno is considering entering into an agreement with BDO bank to deposit P1,000 into a…

A: Compound interest  Compound interest is interest earned on both the principle and the interest over…

Q: An investor had a bank loan to help him in his business. The deal with the bank states that the loan…

A: The value which denotes the present value of some future payments or future value is known as…

Q: Mr smith wants to borrow P100,000 from a bank to rebuild his shop from damages caused by an…

A: First we need to calculate size of quarterly payment of loan amount. PMT =PV*i1-1(1+i)n where PV…

Q: Tandang Sora has deposited P33,000 today in an account which will earn 10 percent annually. She…

A: Given information: Present value : P33,000 Rate of interest : 10% Time period : 7 years Future…

Q: Mr. Nina borrows $425,000 from the bank at 3.5% per year interest over a 30-year period. He can make…

A: Amount borrowed = $425000 Interest rate = 3.5% Period = 30 years  Monthly payment = $1400

Q: Edna invests $30,000 and buys an annuity that pays $2000 every 6 months (1st payment 6 months from…

A: Open MS Excel --> Go to formulas --> Use FV function(Future value) Calculate the future value…

Q: Ashley borrows Php.75,000 from Stella with interest at 6% compounded quarterly. She agrees to pay…

A: Loan amount (PV) = Php. 75000 First payment period = 3 Years First payment quarterly period (t) =…

Q: A woman deposits $12,000 at the end of each year for 15 years in an investment account with a…

A: The question is based on the concept for calculation of the future value by use of compounding…

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.