Answered: 2. A consumer loan has a scheduled…

2. A consumer loan has a scheduled payment of P 2,000 every quarter for 3 years. If money is worth 9% compounded quarterly, how much of the 5 payment goes to pay the interest?.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 19PROB

See similar textbooks

Related questions

Q: $5000 that you have to pay in 7 annual installments of $1100 each, the first one at the end of the…

A: The given problem relates to RATE function in excel. RATE function computes interest rate for no. of…

Q: Today, a businessman borrowed money to be paid in 10 equal quarterly payments starting at the end 2…

A: The amount borrowed can be calculated as the present value of quarterly payments, The present value…

Q: If you take out a 4 year loan for $16,500 at your bank and pay the quarterly payments for the 4…

A: Total interest is = total payments - loan

Q: 2. What is the size of 8 equal annual payments to repay a loan of $1,000? The first payment is due…

A: Installment is the amount of periodic payments a borrower makes to its lender in order to pay back…

Q: What size monthly payments should occur when $10.000 is borrowed at 6% per year compounded monthly…

A: When the interest on interest is charged on monthly basis, it is known as monthly compounding. It…

Q: 1. Compute the difference in the future amount of P500 compounded annually at nominal rate of 5% and…

A: Hi, Thanks for the question. Since you asked multiple questions, we will answer the first question…

Q: 3. You have a bank deposit now worth $5000. How long will it take for your deposit to be worth more…

A: Time period for a present value to accumulate to future value is calculated by NPER function in…

Q: The interest rate is 10% compounded annually. What percentage of the 2nd payment will be interests?

A: In any loan, the equated instalment repayment will include the principal and the interest. Interest…

Q: Laurier Inc. has borrowed $ 65000 from its bank. The annual interest rate on the loan is 4%…

A: Solution Given Amount borrowed $65000 Interest rate 4% Compounding Annually…

Q: 1. If PS00,000 is deposited at rate of 11.25% compounded monthly, determine the compounded interest…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: The going annual interest rate for a loan with a term of 30 years is 6% compounded monthly. The…

A: Going interest rate is the interest rate that is prevailing in the market for loans or bonds. It is…

Q: With interest at 4% compounded quarterly, how much will be required 8 years hence to repay a Php…

A: Payment required to be made after 8 years is calculated as future value of loan amount

Q: If you borrow $3,000 at 6% simple interest per year for seven years, how much will you have to repay…

A: Amount borrowed=$3000Interest rate=6%Number of years=7

Q: quarterly. What is the value of the annuity at the end of the 12 years and how much of the value is…

A: An annuity is the type of payment plan where we exchange a lump sum amount for periodic fixed…

Q: A loan of 10,000 is to be repaid during 5 years with equal monthly payments of p. The interest rate…

A: In this we have to calculate present value of both option.

Q: Hamilton wants to accumulate ₺ 24.000 at the end of 4 years. It starts quarterly payments in a bank…

A: Amount at the end of 4 years = 24000 Years = 4 Terms(n) = 4 *4 = 16 quarterly deposits Rate (r) = 6%…

Q: If the bank quotes a loan APR of 9% per annum, compounded monthly, what do you have to pay back in 1…

A: Compound interest= P(1+r%/n)^tn Interest rate = 9% Borrow amount= 100

Q: A bank deposit of P10,000 earns 3.5% pa compounded quarterly. If inflation is at 5% per year, what…

A: Future value can be referred to as the value of an underlying asset or security at a future date.…

Q: MA1C МАЗА A credit card charges 18% interest per year, compounded monthly. How much interest is…

A: A compounding of interest refers to the cycle after which the interest on interest (earned during…

Q: You invest $4,000 in an account that pays a fixed annual rate of 6% interest compounded yearly. How…

A: In the present question we require to calculate the future value after 7 years from the following…

Q: Finance. Suppose that $7,700 is invested at 4.7% annual interest rate, compounded monthly. How…

Q: Saud borrowed $90,000 now. He will pay off the loan with 10 equal quarterly payments. The first…

A: To find the quarterly payment one can apply the formula in excel called PMT which calculates the…

Q: 1. The Lexington Property Development Company has a RM10,000 note receivable from a customer due in…

A: Present value is the value of an investment in today’s time. It helps to make decisions better.

Q: A loan is to be repaid quarterly for 5 years that will start at the end of 2 years. If interest rate…

A: The Loan amount will be equal to the present value of payments today. Effective quarterly interest…

Q: Today, a businessman borrowed money to be paid in 10 equal quarterly payments starting at the end 2…

A: The amount borrowed can be calculated with the help of present value of annuity function. The…

Q: You borrow $5000 now and agree to pay this whole amount back in three payments: Payment 1. $X in 3…

A: Amount borrowed (B) = $5000 P1 = X in 3 months P2 = 2X in 7 months P3 = 2X in 12 months

Q: A loan taken from Riyadh Bank; needs to be paid off, in N years. If the loan is equal to 40…

A: Let the identical payments be x. so the loan value will be 40x. It is given that the interest rate…

Q: If $0,000 per quarter is invested in an account that eams a nominal annual interest rate of 9%…

A: The amount in the account at the end of the 6 years is the future value. The nominal annual rate…

Q: I. Hamilton wants to accumulate ₺30000 at the end of 4 years. It starts quarterly payments in a bank…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: 2. Suppose the interest on a $10,000 debt is 8% compounding quarterly. You plan on making 10 equal…

A: P= $10,000 r= 8% compounding quarterly= 0.08/4= 0.02 n= 10 years= 40 periods Calculate the annual…

Q: 3. A loan of $6000 was repaid by quarterly payments of $450. If interest was 12% compounded monthly,…

A: To find the amortization period, first, we have to calculate the effective interest rate. Effective…

Q: How long (in years) will it take to repay a $100,000 loạn taken out today at 7% compounded monthly,…

A: The time value of money is the one widely used by companies and individuals to determine the current…

Q: A borrower had a loan of $70,000.00 at 6% compounded annually, with 8 annual payments. Suppose the…

A: The question is based on the concept of Loan & Amortization.

Q: A mortgage that was originally $20,000 is being paid off in regular quarterly payments of $500. The…

A: Mortgage Amount = 20,000 Interest Rate = 8%/4 = 2% per quarter Quarterly Payment = 500 Principal…

Q: A loan is to be repaid quarterly for 9 years that will start at the end of 4 years. If the interest…

A: Quarterly payment (Q) = 10000 First payment starts after 16 quarters. Number of payments (n) = 36…

Q: Money borrowed today is to be paid in 6 equal payments at the end of 6 quarters. If the interest is…

A: A study that proves that the 1value of money today is higher than the future value of money is term…

Q: The 12% add on loan is to be repaid in monthly installments over 2 years. The amount borrowed was…

A: Calculation of Monthly Payment:The monthly payment is $279.Excel Spreadsheet:

Q: You borrow 10.000 USD for 4 years to be paid with equal installments. The rate is 10% a-what is…

A: Remaining principal after a certain time period denotes the outstanding principal at the end of that…

Q: MONEY BORROWED TODAY IS TO BE PAID IN 6 EQUAL PAYMENTS AT THE END OF 6 QUARTERS. IF THE INTEREST IS…

A: Borrowing is defined as the term, which used to allow the person to spread their funds around with…

Q: Finance. Suppose that $6,000 is invested at 3.8% annual interest rate, compounded monthly. How much…

A: To calculate the future value we will use the below formula Future value = PV*(1+r/m)t*m Where PV…

Q: 6. A consumer loan worth 83,000 pesos is to be repaid in 18 months at 8% convertible monthly. How…

A: Here, Details of Ques-6: Mortgage Amount (P) is 83,000 pesos Interest Rate (r) is 8% Compounding…

Q: You borrow $5000 now and agree to pay this whole amount back in three payments: Payment 1. SX in 3…

A: The value of a certain amount of money at the current time will not be the same as the value of the…

Q: What is the compound amount when $6400 is deposited in an account earning an interest rate of 6%,…

A: Because you have posted multiple questions, we will answer the first question only, For the…

Q: A debt of $ 900 is repaid by making payments of $50 at the end of every 6 months. If interest is 3%…

A: The amount of loan is equal to the present value of installment discounted at the required rate of…

Question

Solve the problem completely

2. A consumer loan has a scheduled payment of P 2,000 every quarter for 3 years.
If money is worth 9% compounded quarterly, how much of the 5 payment goes
to pay the interest?.
be omortizod by naving monthly nav ments

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
Calculating single-payment loan amount due at maturity. Stanley Price plans to borrow 8,000 for five years. The loan will be repaid with a single payment after five years, and the interest on the loan will be computed using the simple interest method at an annual rate of 6 percent. How much will Stanley have to pay in five years? How much will he have to pay at maturity if hes required to make annual interest payments at the end of each year?
Calculating and comparing add-on and simple interest loans. Eli Nelson is borrowing 10,000 for five years at 7 percent. Payments, which are made on a monthly basis, are determined using the add-on method. a. How much total interest will Eli pay on the loan if it is held for the full five-year term? b. What are Elis monthly payments? c. How much higher are the monthly payments under the add-on method than under the simple interest method?
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?