Answered: A student loan for $32,000 is paid back…

A student loan for $32,000 is paid back in monthly payments over ten years with an interest rate of 6.5%. a) find the monthly payment b) find the total payments over ten years

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 6FPE

See similar textbooks

Related questions

Q: Suppose you borrowed Php 30,000 on a student loan at a rate of 8% and must repay it in three (3)…

A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…

Q: You have a new 10 year Student loan for $20,000.00 that charges an interest rate of 6.45% compounded…

A: Amortization: It is the systematic writing-off of premium or discount on bonds issued. If the market…

Q: Assume that you can get a loan from NCB for $264,500 for three years to buy an item of your…

A: Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a sum…

Q: You repay a student loan of $20,000 in equal monthly installments over 5 years at a nominal interest…

A: Equated monthly installment is referred to as an amount payable for each and every month to the bank…

Q: A loan of £4,000 is to be repaid over 5 years by a level annuity payable monthly in arrears. The…

A: Loan payback is the process of repaying a lender for the money borrowed. The loan is repaid in a…

Q: You have a new 10 year Student loan for $18,500.00 that charges an interest rate of 8.55% compounded…

A: Loan: The loan is a value that is borrowed from external sources like banks and this amount is…

Q: 1.-What is the size of 60 monthly payments and 5 annuities that result from the purchase of land…

A: As per the honor code, we’ll answer only one question at a time, we have answered the first question…

Q: A loan of $2,000 is paid by the following series of payments, beginning one year after the loan is…

A: Amortization table shows the break up of instalments for the interest charged on the outstanding…

Q: A recent graduate's student loans total $17,000. If these loans are at 4.2%, compounded quarterly,…

A: using financial calculator, N = 8*4 =32 I/Y = 4.2%/4 = 1.05% PV = -17,000

Q: Determine the value at the end of five years of a $7,000 investment (today) in a bank certificate of…

A: Future Value = Present Value * (1+rate)^n Where, Rate = 9%/2 = 0.045 n = no. of compounding period =…

Q: A loan of size L is to be paid off by payments of 2000 each year for 10 years. The principal repaid…

A: The question is based on the concept of loan amortization and sinking fund. The question can be…

Q: You borrow ksh 1,000,000 from a bank for 5 years at 10% compound interest .The loan is repayable in…

A: Present value (PV)= 1,000,000 Time (t)= 5 years Rate (r)= 10% = 0.1 The present value is how much…

Q: A certain college graduate borrows 8658 dollars to buy a car. The lender charges interest at an…

A: Installment is the amount of periodic payment a borrower has to make to its lender in order to pay…

Q: Acertain college graduate borrows 5707 dollars to buy a car. The lender charges interest at an…

A: This question is related to the loan. In which a graduate student borrows a loan from the bank. In…

Q: A student loan with a simple annual interest rate of 2.5% must be paid back in ten years. A student…

A: Given data, Interest rate(r)=2.5% or 0.025 per annum Total interest(I)=P2,000 Time(t)=10 years

Q: Kingsley Toyota borrowed $100,000 from a local bank. The loan requires Kingsley to pay 10 equal…

A: Step 1: Compute the present value of an ordinary annuity of $1.

Q: Given that the $400,000 loan with a 8% interest rate over 4 years. Show how to get the beginning…

A: Monthly payment= Loan/(PVA, 8%,4 years) = 400000/3.31212 = $ 120768

Q: Excellent bank has offered you, a GHC 60,000 35year loan to purchase equipment in your Factory. The…

A: Interest is an amount which is charged on deposited or borrowed amount on loan period. It is a cost…

Q: U.S. Fax has been granted a loan from a commercial finance company for $1 million at a stated…

A: Effective Cost of Debt(ECD) refers to the total amount that is paid by borrower to lender for taking…

Q: A business received a for year $2,000,000 loan at an interest rate of 7% per year. The principal is…

A: NPV means PV of amount which is receive or pay in future. NPV can be find by using discounting rate…

Q: *A KSU graduate plans to start a consulting firm now by borrowing $75,000 at a compound interest…

A: Solution Given Loan amount $75000 Interest rate 5% Number of year 10 years We…

Q: You borrow $10,000 from a bank for three years at an annual interest rate of 12% compounded…

A: Given information : Borrowed amount $10,000 Interest rate 12% Time period (years) 3 Note :…

Q: A personal loan for $20,000 has an interest rate of 12% over 5 years with monthly payments. What is…

A: Equated Monthly Instalment(EMI) means a part of the equally divided monthly amount paid for the…

Q: Consider a student loan of $20,000 at a fixed APR of 9% for 20 years. a. Calculate the monthly…

A: Monthly Mortgage Payment refers to the payment that is to be paid monthly for a specific period of…

Q: Solve the followings (a) ! A 40-year loan is paid with level annual payments at the end of each…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Establish loan amortization schedules for 3-year loan of $20,000 (initial loan) with equal payments…

A: Answer Loan amount = $20,000 Interest rate = 5%

Q: A finance company uses the discount method of calculating interest. The loan principal is $5,000,…

A: Future Value = Present Value * (1+r)^n

Q: A person borrowed a loan and pledged to repay it and its interest using the amortization method, out…

A: The present value of the annuity should be used here since the payment is made at regular intervals…

Q: A college student receives an interest free loan of $8250 from a relative. The student will repay…

A: Amount remaining to be paid is given by: Amount remaining to be paid = Actual amount - Amount paid…

Q: Consider a student loan of $12,500 at a fixed APR of 12% for 20 years. a. Calculate the monthly…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: Bank JPX is offering personal loans of $35,000 to be repaid over 6 years with payments of $625 per…

A: Here, To Find: Effective annual rate (EAR) =?

Q: Need help with this question please. Thank you!

A: a.

Q: A loan of $22,000 is to be financed to assist a person's college education. Based upon monthly…

A: Nominal interest rate refers to the interest rate before taking inflation into account. Nominal can…

Q: A loan of $27900 is repaid by payments of $675 at the end of every quarter. Interest is 4%…

A: Given: Particulars Amount Loan(PV) $27,900 Payment(PMT) $675 Quarters 4 Interest rate 4%

Q: Excellent bank has offered you, a GHC 60,000 35year loan to purchase an equipment in your Factory.…

A: GHC=60000 After 35 year the loan amount will be =$134,964.00 Effective Annual Interest Rate-…

Q: Calculate and print out the balance due, principal payment, and interest payment for each period of…

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

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: You borrow $7,000 to help pay your college expenses . You agree to repay the loan at the end of 4…

A: Given information: Principal amount is $7,000 Interest rate is 8% compounded quarterly Number of…

Q: A home is purchased for $230,000 with an amortized loan over 15 years at an interest rate of 4.4%.…

A: Note : As per our guidelines, we can only answer three subparts at once. Please post other parts…

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

A: PV = 1000 FV = 0 rate = 10% N = 8 use PMT function in Excel

Q: Lisa has a $37,500 student loan at 3.15% compounded quarterly amortized over 16 years with payments…

A: Interest refers to the amount charged by the lender on the lent amount. The borrower of the loan is…

Q: A certain college graduate borrows 7406 dollars to buy a car. The lender charges interest at an…

A: Continuously compounded interest rate refers to the interest rate that is calculated on the…

Q: A student loan for $32,000 is paid back in monthly payments over ten years with an intrest rate of…

A: PMT=P×RN1-1+RN-NT where, PMT = monthly payment R = rate n = no of compounding t = no of years of…

Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

A student loan for $32,000 is paid back in monthly payments over ten years with an interest rate of 6.5%. a) find the monthly payment b) find the total payments over ten years

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 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

If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
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)?
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 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?
Halep Inc. borrowed $30,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $8,264.70 at the end of each year. Prepare an amortization table showing the principal and interest in each payment.