An aunty deposits $10,000 into an account earning 2% p.a. pounded quarterly. She wants a total of 20 regular quarterly pay- ments to be made out of the account and into her niece's account at the beginning of each quarter. com- (a) If the first payment is made now then what is the value of the regular payment? Give your answer rounded to the nearest cent. (b) If the first payment is made in two year's time then what is the value of the regular payment? Give your answer rounded to the nearest cent. (c) How many quarters should the payments be deferred to achieve a regular payment of $550 per quarter? Round your answer up to nearest whole quarter.

Q: John Perez receives P 90,000.00 credit for his old automobile when buying a new model costing P…

A: The question can be solved as follows:

Q: Jesse received a loan of $26,000 from the bank at 5.50% compounded monthly. If he had to repay $300…

A: First we need to find the total tenure of loan. Loan amount = PV of instalments PV = E(1-(1+r)-p)/r…

Q: 4-19 Tina owes $12,000 on her automobile loan, which has an interest rate equal to 4.8 percent…

A: Compound interest: The amount of interest received or earned for multiple-interest time periods, on…

Q: The owner of Oak Hill Squirrel Farm deposits $2,000 at the end of each quarter into an account…

A: In the given question we need to compute the future value after 9 years, 6 months.

Q: Helen has two debts to pay; a $3500 today and a $4500 in 9months from today. How much should she pay…

A: Present Value(PV) is value of a future amount at current point of time. It is done by discounting…

Q: A couple who borrow $60,000 for 25 years at 6%, compounded monthly, must make monthly payments of…

A: Calculate the interest amount for first year as follows: Interest = Amount * Interest rate Interest…

Q: a) Nancy takes a personal loan and will repay the loan by 6 quarterly deposits of $5,000 starting in…

A: Loan and its repayments: A loan taken is repaid either in periodic fixed/variable instalments over…

Q: How many payments will you have made when your account balance reaches $15,000?

A: Future Value of Annuity: It is the worth of the recurring cash flows or payments at a certain…

Q: ordan received a loan of $1,300 at 4.50% compounded quarterly. She had to make payments at the end…

A: Given: r=4.50% yearly =4.50/(4×100) quarterly =0.01125R (Quarterly payment)=?n=1 years =4…

Q: Abigail received a loan of $41,000 from the bank at 5.75% compounded monthly. If she had to repay…

A: Using Excel

Q: Alice borrowed $8,000 from her grandmother to buy The interest rate being charged is 4.5% compounded…

A: The present value of annuity due refers to the current value of a series of future payments. The…

Q: Taylor deposits $1500 in an account earning 4.7% interest compounded annually. How much will Taylor…

A: Future Value = Present Value x (1+ Periodic Interest Rate)^No. of Periods

Q: Diane invested $4500 in an account that pays an annual interest rate of 3.7%, compounded monthly.…

A: Amount in the account after one year= $ 4669.35 Effective rate of interest = 3.76%

Q: effrey deposits $406.00 every month into his son's RESP for the next fifteen years unti his son goes…

A: Future value of deposit includes the amount being deposited and compounding interest accumulated…

Q: A couple who borrow $60,000 for 15 years at 8.4%, compounded monthly, must make monthly payments of…

A: Loan is a value which is borrowed from external sources like banks and this amount is repaid later…

Q: Pamela borrows $2500 at 12% per annum simple interest for 2 years. In addition, a few of $200 is…

A: Simple interest refers to the simplest method of calculating the financier charges applied on the…

Q: A couple who borrow $70,000 for 15 years at 6%, compounded monthly, must make monthly payments of…

A: Given: Monthly payment = $590.70 Loan = $70,000 Years = 15 Interest rate = 6%

Q: Tim Houston purchased a wall unit for $2,400. He made a $600 down payment and financed the balance…

A: The yearly rate that borrower pays on loan and investors receives on deposits is the annual…

Q: The owner of Sebastopol Tree Farm deposits $450 at the end of each quarter into an account paying…

A: Future value of a present value is the value of that amount after taking into account the time value…

Q: a) Bianca takes out a 20-year home loan of $480,000 for her property. She makes equal month-end…

A: A mortgage loan is the type of loan that is provided to a borrower by a bank or financial…

Q: A couple who borrow $70,000 for 20 years at 7.2%, compounded monthly, must make monthly payments of…

A: a) Unpaid Balance= Beginning balance - principal repayment

Q: Helen borrows $1000. To repay the amount, she makes 12 equal monthly payment of $93.12. Determine…

A: Interest rate is a value at which additional amount is received or paid on deposited amount.…

Q: If you buy a computer directly from the manufacturer for $2.634 and agree to repay it in 36 equal…

A: Present Value of Ordinary Annuity refers to the concept which gives out the discounted or today's…

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: You’re prepared to make monthly payments of $265, beginning at the end of this month, into an…

A: Monthly payment (P) = $ 265 Future value (FV) = $ 68000 Annual interest rate  =9% Monthly interest…

Q: What is the value of the account at the end of 9 years?

A: Depositing equal amounts at the end of the period for a fixed time period is in the form of an…

Q: Engr. Russel Clarete loan an amount of P200,000 at a local commercial bank at 12% compounded…

A: The series of monthly payments discussed here is a form of annuity wherein an equal payment is made…

Q: Tim Houston purchased a wall unit for $2,300. He made a $600 down payment and financed the balance…

A: Given, Wall unit Cost =$2300 Down payment =$600 Loan Installment = 48 months Payments = $43.5 per…

Q: Tim Houston purchased a wall unit for $2,300. He made a $600 down payment and financed the balance…

A: Financing an item provides a facility to the purchaser to make the payment of the item in small…

Q: A person needs $20,000 immediately as a down payment on a new home. Suppose that she can borrow this…

A: Loan amount (PV) = $ 20,000 Annual interest rate = 10% Number of compounding per year = 6 Effective…

Q: Todd Gunderson buys a new computer system for $2,000, plus 8% sales tax.  He financed the entire…

A: The purchase value of the system is $2,000, plus 8% sales tax. The installment cost is $60.…

Q: Beginning in January, a person plans to deposit $10 at the end of each month into an account earning…

A: Future value of annuity is a stream of regular , fixed interval cashflow compounded at specified…

Q: You're prepared to make monthly payments of $260, beginning at the end of this month, into an…

A: The number of payments made can be calculated with the help of NPER function of Excel

Q: how much will she have in her account after 11 years

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: Tim Houston purchased a wall unit for $2,400. He made a $600 down payment and financed the balance…

A: The yearly rate that borrower pays on loan and investors receives on deposits is the annual…

Q: At the end of each quarter, Patti deposits $1,800 into an account that pays 10% interest compounded…

A: Future Value of Annuity = Present Value x [{(1 + i)n - 1} / i]

Q: Elizabeth Brown has $23,000 that she can deposit into a savings account for five years. Bank A…

A: Here, we need to calculate the future value of the amount deposited today at a given interest rate…

Q: The owner of Oak Hill Squirrel Farm deposits $3,000 at the end of each quarter into an account…

A: This question require us to compute the value at the end of 6 years, 6 months from following…

Q: Doris purchased a Steinway concert piano for $132,000 with a down payment of 25%, and a loan for the…

A: Cost of piano is $132,000 Down payment is 25% Equal Monthly Payment is $1,650 Interest rate…

Q: A couple who borrow $70,000 for 15 years at 8.4%, compounded monthly, must make monthly payments of…

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

Q: ) Bianca takes out a 23-year home loan of $750,000 at the interest rate of 3% p.a. compounded…

A: Given: Particulars Amount Borrowed(PV) $750,000 Years 23 Interest rate 3.00%

Q: An uncle has deposited $10,000 into an account that is paid quarterly at an annual rate of 2%. The…

A: The present value of the annuity is the current worth of a cash flow series at a certain rate of…

Q: A 12-month certificate of deposit at Middlesex Savings Bank is advertising a 1.2% annual percentage…

A: The future value is the future worth of the amount that will be paid or received at the end of the…

Q: Stan Moneymaker has a bank loan for $10,000 to pay for his new truck. Thisloan is to be repaid in…

A: Each time a person makes a payment on a loan he pays some interest along with a part of the…

Q: A couple who borrow $100,000 for 30 years at 8.4%, compounded monthly, must make monthly payments of…

A: Loan amount is $100,000 Time period is 30 years Interest rate is 8.4% Monthly payment is $761.84

Q: Beatrice deposits $75 at the end of each month into an account earning 4.75% compounded monthly. How…

A: Compound interest refers to the interest accrued not only on principal amount but also on the…

Q: If you buy a computer directly from the manufacturer for $2,825 and agree to repay it in 48 equal…

A: Principal = $ 2825 Number of monthly installments = 48 Monthly interest rate = 1.94%

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.