A customer of your bank comes for a car loan 10000 OMR. He is charged with an interest rate of 5% per year. The customer expects a monthly repayment schedule from you, to plan his repayment. Provide a loan amortization schedule for monthly repayment of 1 year.

A customer of your bank comes for a car loan 10000 OMR. He is charged with an interest rate of 5% per year. The customer expects a monthly repayment schedule from you, to plan his repayment. Provide a loan amortization schedule for monthly repayment of 1 year.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 41P

See similar textbooks

Related questions

Q: C) A homebuyer approached the bank for a home loan of RO 87,000. The bank has approved the loan…

A: As per company policy it is only possible to solve the first question.

Q: You go to the loan fund of the company where you work and find that they have an emergency fund…

A: Given, that the payments in month 3,6,9,12 is double than the normal payments in other months.…

Q: Asher plans to take out a loan of $7 Hamster wheel bank charges a com interest. After two years how…

A: Ashar Plans to take out a loan of $750 to buy a life-sized hamster wheel. Hamster wheel bank charges…

Q: Assuming that the dealership offers you 5-year loan at 4.7% compounded monthly, what payments would…

A: The question is based on the concept of Annuity in Financial Management. Annuity refers to the…

Q: The following loan is a simple interest amortized loan with monthly payments. (Round your answers to…

A: Using excel PMT function

Q: In ‘N Out Payday Loans advertises that for a fee of only $10, you can immediately borrow up to $200…

A: Calculation of nominal interest rate per month =Amount of fees / Amount of borrowings = 10/200 =0.05…

Q: You are offered an add-on loan for $4,500 at 18% for 5 years. What is the monthly payment? What is…

A: Hello, I am only answering first question as per the policy and if you want others to be answered…

Q: Task If you are planning to apply for a personal loan and borrow PhP 30,000 and repay principal and…

A: In case of loan repayments, the principal of compound interest is applicable. The total monthly…

Q: You have taken a personal loan from Bank Muscat for 15000 OMR and charged with an interest raté of…

A: The formula sheet is: The calculation is:

Q: A man plans to take a vacation in 5 years. He wants to buy a certificate of deposit for $1300 that…

A: To calculate the simple interest rate we will use the below formula Interest rate = [(A-P)/P]/T…

Q: You need a home loan of $95,000 after your down payment. How much will your monthly house payment be…

A: Loan amount (PV) = $95000 Interest rate = 6.25% Monthly interest rate (r) = 6.25%/12 =…

Q: If you have a $19,500 car note with a $380.00 monthly payment, payable over 60 months, what interest…

A: In the above question we need to compute the interest rate from following details: Value of card…

Q: A customer of your bank comes for a car loan 10000 OMR. He is charged with an interest rate of 5%…

A: Fixed monthly payment =P× r ×(1+r)n(1+r)n-1 Where : P = Loan amount r = monthly rate of interest n =…

Q: If you are planning to apply for a personal loan and borrow PhP 50,000 and repay the principal and…

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

Q: First Bank offers you a car loan at an annual rate of 10% compounded monthly. What effective annual…

A: Effective annual interest rate is the rate of interest actually earned due to compounding of…

Q: Find the monthly amortization of the loan.

A: Monthly Amortization: It refers to the monthly payments made to the lender by the borrower for…

Q: The following loan is a simple interest amortized loan with monthly payments. (Round your answers to…

A: A type of loan in which the borrower has to make a schedule for the periodic payment regarding both…

Q: Suppose you wanted to buy a $200,000 house. You have $30,000 cash to use as the downpayment. The…

A: Given PV = amount of loan = 200000-30000 = $ 170000 r = rate of interest = 6/12 = 0.05 n = number of…

Q: Suppose you purchase a car for a total price of $22,565 including taxes and license fee, and finance…

A: A mortgage (or loan) with a fixed annual stated rate is the net amount of borrowings that a borrower…

Q: You buy items costing $800 and finance the cost with a fixed loan installment for 18 months at 5%…

A: As we are told that interest rate charged on the loan is simple and not compounding, moreover we are…

Q: You purchase a home and secure a 30 year equal payment loan for $200,000 at a interest rate of 5.25%…

A: The number of months to stay will be around 6 months.

Q: If you lend $3200 to a friend for 15 months at 10% annual simple interest, find the future value of…

A: Calculate the future value as follows: Future value = Amount + Interest Future value = Amount +…

Q: A payday lender lends money on the following terms: “If I give you $100 today, you will write me a…

A: An interest method in which current interest is computed by multiplying the interest rate by the sum…

Q: You want to buy a car, and a local bank will lend you $15,000. The loan will be fully amortized over…

A: Time value of money (TVM) refers to the concept which proves that the value of money today is higher…

Q: A customer of your bank comes for a car loan 10000 OMR. He is charged with an interest rate of 5%…

A: Formulas:

Q: If you are planning to apply for a personal loan and borrow PhP 30,000 and repay the principal and…

A: Loan Amount = Php 30,000 Time Period = 3 Years

Q: You borrow 180000 for 12 years from a bank in order to renovate your flat. The effective interest…

A: Loan Amount = 180,000 Time Period = 12 years Interest Rate = 4.8%

Q: Use PMT =- to determine the regular payment amount, rounded to the nearest dollar. Your credit card…

A: Here, Balance of Credit Card (P) is $4,500 Interest Rate (r) is 10.5% Compounding Period (n) is…

Q: You are planning for your future by depositing lump sum into a time deposit account, what amount…

A: Annuity is a series or level of cash flows that occur at the particular time periods. It is the…

Q: Suppose you purchase a car for a total price of $24,790 including taxes and licensee and finance…

A: To find the monthly payment, we will use the present value of annuity formula and adjust it to find…

Q: You lend a friend $10,000, which your friend will repay in 5 equal annual end-of-year payments of…

A: Computation:

Q: payment

A: Monthly payments are nothing but the payment which has to be made by the borrower every month. The…

Q: A man plans to take a vacation in 4 years. He wants to buy a certificate of deposit for $1200 that…

A: We need to use compound interest formula to solve this problem A=P(1+r)n Where A =Amount/Final…

Q: you receive a credit card offer that charges interest at 1.75% per month compounded monthly. What is…

A: Information Provided: Interest rate = 1.75% Compiunding = monthly

Q: Angus can obtain a residential mortgage loan from a bank at 7.00% compounded monthly. What is the…

A: given information interest rate = 7% = 0.07 compounded monthly time period = 1 year

Q: How much is your monthly payment? use monthly compunding formula

A: Answer:

Q: annual loan payment

A: Annual Loan Payment: Annual loan payment is the amount to be paid in a year on the loan taken.…

Q: A student takes out a short-term loan to pay for tuition, books, and supplies. If the simple…

A: Total repayment = Principa amount + Interest on loan

Q: You need a home loan of $65,000 after your down payment. How much will your monthly house payment be…

A: FORMULA Monthly payment = LV/[1-(1+R)-N]/R Where LV - Loan amount i.e. $65000 R - Monthly interest…

Q: To purchase a new truck, you borrow $42,000. The bank offers an interest rate of 7.5% compounded…

A: Loan amount $ 42,000.00 Interest Rate 7.50% Time Period(Years) 5

Q: You get a student loan of $20,000 with an annual interest rate of 6% where you make a payment once a…

A: The question is based on the concept of Financial Management. Annuity refers to the series of equal…

Q: You take out a 4-year, $3,750 loan at 8% simple annual interest. The lender charges you a $150 fee.…

A: Definition: Interest: Fee charged on the borrowed amount.

Q: You have taken a personal loan from Bank Muscat for 15000 OMR and charged with an interest rate of…

A: Amortized Loan is a type of loan in which the borrower would pay periodic payments that are applied…

Q: Loans You have a $6,000 credit card debt, and you plan to pay it off through monthly payments of…

A: Loan amount (PV) = $6000 Monthly payment (P) = $150 Interest rate = 15% Monthly interest rate (r) =…

Question

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps with 2 images

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)?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
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?
You put $250 in the bank for S years at 12%. 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 fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
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?
Calculating interest and APR of installment loan. Assuming that interest is the only finance charge, how much interest would be paid on a 5,000 installment loan to be repaid in 36 monthly installments of 166.10? What is the APR on this loan?