Angus can obtain a residential mortgage loan from a bank at 7.00% compounded monthly. What is the effective annual rate of this loan? (round to two decimals and show all inputs in rough work)

Q: Pursell Bank offers you a five-year loan for $100,000 at an annual interest rate of 6.8 percent.…

A: Here, Loan Amount is $100,000 Interest Rate is 6.8% Loan Period is 5 years Compounding Period is…

Q: You are considering a car loan with a stated APR of 6.78% based on monthly compounding. What is the…

A: Effective annual rate is the rate of interest that actually paid or earned. It can be calculated by…

Q: person borrows $2,850 on a bank credit card at a nominal rate of 18% per year, which is actually…

A: a.  Annual Percentage Yield      APY =[ (1+r)^n - 1]       APY = [(1+0.015)^12-1]       APY…

Q: You plan to purchase a $390,000 house using either a 30-year mortgage obtained from your local…

A: The question is based on the concept of Financial Management.

Q: Suppose you have received a credit card offerfrom a bank that charges interest at 1.4% per…

A: Working note:

Q: Suppose you have three personal loans outstanding to your friend Elizabeth. A payment of $1,000 is…

A: To Find: Annual percentage rate Monthly payment   Note:- As method of Calculation is not given, I…

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: Suppose you obtain a 30-year mortgage loan of $196,000 at an annual interest rate of 7.9%. The…

A: To find the monthly payment for the mortgage, Property tax and fire insurance for 30 year loan of…

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: a. If you borrow $1,100 and agree to repay the loan in six equal annual payments at an interest rate…

A: Part (a)Let the annual payment be P. Interest rate, i = 11%; n = period = number of payment =…

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: If you borrow $7,500 at $550 interest for one year, what is your effective interest rate for the…

A: The effective rate of interest refers to the return on savings or interest on the investment…

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: Assume you graduate from college with $26,000 in student loans. If your interest rate is fixed at…

A: Loan amount (X) = $26000 r = 5% per annum = 5%/12 = 0.4167% per month n = 10 years = 120 months Let…

Q: find i (the rate per period) and n (the number of periods) for each loan at the given annual rate.…

A: Calculation of Number of periods and monthly interest rate: Answer: Number of periods is 48 monthly…

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: If your bank approves a $300,000 mortgage for your new home, at an annual percentage rate of 4.5%…

A: Loan amount = $ 300,000 Interest rate = 4.5% Monthly interest rate = 4.5%/12 = 0.375% Monthly…

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: maximum loan

A: Loan amount refers to the amounts which a person borrowed at any given time under the mortgage. It…

Q: Suppose you take out an auto loan for $25,500 over a period of six years at an APR of 7.5%.…

A: The annual percentage rate refers to the yearly rate of interest paid for a loan or received from an…

Q: You have just purchased a home by borrowing $400, 000 for 30-years at a fixed APR of 3.87%. The loan…

A: Answer.  APR means Annual periodic interest rate

Q: You have taken out a home loan of $400,000 at an interest rate of 3.6% per annum compounded monthly.…

A: A loan is a debt amount borrowed by one person from another person. A loan payable in equivalent…

Q: Assume  you have secured a loan of $10,000 from a bank  which will be paid in one year. The bank has…

A: Month Instalment Interest Paid = Opening Balance  x 0.31% Principal Opening Balance Closing Balance…

Q: Peterson wants to make bi-weekly, end of period payments of $2,000 on a loar If the term of the loan…

A: We have to calculate annual payment and from that we can calculate present value of loan.

Q: Suppose your gross monthly income is $5,600 and your current monthly payments are $525. If the bank…

A: Step 1: The calculation is:

Q: You take out a $7,000 car loan that calls for 60 monthly payments starting after 1 month at an APR…

A: The present value of annuity refers to the current value of regular payments made at fixed intervals…

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: Someone is borrowing from a five-six ( Bumbay ) money lender. How much will   be charged if you want…

A: Interest is referred to as the monetary charge which is to be paid to the moneylender on the…

Q: Ross Land has a loan of $8,500 compounded quarterly for four years at 4%. What is the effective…

A: Effective rate of Interest-The effective rate means the actual rate of interest which is accrued on…

Q: Solve the problem. If​ necessary, use the accompanying table of monthly payments. Round your answer…

A: Mortgage Amount (PV) = $105,250Interest rate (rate) = 10%Term of Mortgage = 25 yearsNumber of…

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: You have taken out a 30-year loan of $55,000 with 6% interest (APR) compounded monthly and with…

A: An amount or asset borrowed by an entity from an individual or financial institution is known as a…

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: Suppose you obtain a 30-year mortgage loan of $195,000 at an annual interest rate of 8.6%. The…

A: Monthly property tax =Annual property tax /12 Monthly property tax = $969/12 Monthly property tax =…

Q: Suppose Jorge Otero has set up an annuity due with a certain credit union. At the beginning of each…

A: Month deposit (P) = $ 130 Interest rate = 6% Monthly interest rate (r) = 6%/12 = 0.50% Period (n) =…

Q: Suppose you obtain a 30-year mortgage loan of $193,000 at an annual interest rate of 8.6%. The…

A: Mortgage loan is a kind of secured loan, whereby, the lender provides the desired funds to the…

Q: If you borrow $9,983 and are required to pay back the loan in five equal annual installments of…

A: Loan is an agreement between lender and borrower where lender provide funds to borrower for definite…

Q: You have taken out a home loan of $400,000 at an interest rate of 3.6% per annum compounded monthly.…

A: Given question: Amount of loan : $400,000 Rate of interest : 3.6% per annum  Number of payments :…

Q: Assume  you have secured a loan of $10,000 from a bank  which will be paid in one year. The bank has…

A: Interest payable = Opening Balance * Monthly interest rate

Q: If you buy a computer directly from the manufacturer for $2,241 and agree to repay it in 48equal…

A: Using Excel PMT function.

Q: We assume that we have a secured a loan of $10,000 from a bank which will be paid in one year. The…

A: Loan: The duration of a loan, or the amount of time it takes for a loan to be repaid in full when…

Q: your bank also requires that the monthly mortgage payments include properety tax and homeowners…

A: Formulas: Total monthly payment = Monthly payment of property tax + Monthly payment of insurance

Q: A recent graduate's student loans total $18,000. If these loans are at 4.2%, compounded quarterly,…

A: Given: Loan = $18,000 Interest rate = 4.2% Years = 6

Q: You will be paying off a mortgage of $250,000 over the next 25 years. You have signed a loan…

A: A loan amortization table is a schedule of payments to pay back the loan in installments. It…

Q: Suppose that you're planning a vacation and borrow $2,000 from a bank for one year at a stated…

A: The real interest that an investor earns on the investment and a borrower pays on loan after…

Q: A recent graduate's student loans total $17,000. If these loans are at 5%, compounded quarterly, for…

A: Given: Loan amount = $17,000 Interest rate = 5% Years = 8

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.