Assume that you borrowed $500 from a friend and promised to repay the loan in five equal annual installments beginning one year from today. Your friend wants to be reimbursed for the time value of money at an 8% annual rate. Explain how you would compute the required annual payment.

Q: On the day you entered college, you borrowed $30,000 from your local bank. The terms of the loan…

A: The computation of total interest is done as shown:

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 borrowed $650,000 from a bank at an interest rate of 63% compounded quarterly to purchase a new…

A: Monthly payments can be calculated by present value of annuity as the money borrowed (Loan) is the…

Q: If I loaned 163,085 today and promised to pay it back after 5 years to the bank with monthly…

A: Loan amount (P) = 163,085 Annual interest rate = 0.11 Monthly interest rate (r) = 0.11/12 =…

Q: Assume you graduate from college with $30,000 in student loans. If your interest rate is fixed at…

A: The monthly payment amount can be calculated with the help of present value of annuity function

Q: If you borrow $2800 and agree to repay the loan in 5 equal annual payments at an interest rate of…

A: Using excel PMT function to calculate the yearly payment

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: Suppose you loan $10,000 for 1 year to an individual who agrees to pay you interest at a compound…

A: Interest charged on the principal amount and the interest accrued is known as Compound Interest. It…

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 overhear your friend saying that he is repaying a loan at P5,000 every month for the next three…

A: Using excel PV function

Q: Sam Robinson borrowed $10,000 from a friend and promised to pay the loan in 10 equal annual…

A:

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: A depositor puts $30,000 in a savings account that pays 4% interest, compounded quarterly. Equal…

A: A perpetuity is a security that pays for an infinite amount of time. In finance, perpetuity is a…

Q: You have just taken out an installment loan totaling $50,000 to purchase a 1969 Pontiac Lemans…

A: in this we have to calculate present value FACTOR and from that we will annual payment.

Q: Assume you graduate from college with ​$32,000 in student loans. If your interest rate is fixed at…

A: given, P = $32000 r=4.9% m =12 (monthly compounding) n = 10 year

Q: Robert bought a photocopying machine on an installment basis with 15, 103 downpayment and 84 monthly…

A: Present Value(PV) is current value of any future amount. It is calculated by discounting that future…

Q: You plan to prepare for retirement by making monthly contributions $1,500 to a savings account that…

A: Accumulated savings is defined as the savings, which amount for putting the back or investment each…

Q: Suppose that you borrow $10,000 for four years at 8% toward the purchase of a car. Find the monthly…

A: The amortization schedule shows the periodic loan payment owed for each period, the amount of…

Q: If you borrow $2,800 and agree to repay the loan in five equal annual payments at an interest rate…

A: In this problem we have to find present value FACTOR and from that we can find out annual payment.

Q: If you borrow $2,200 and agree to repay the loan in five equal annual payments at an interest rate…

A: Loan means lending money by one or more individuals or organizations to other individuals or…

Q: Mary Jones recently obtained an equipment loan from a local bank. Theloan is for $15,000 with a…

A: Given information: Loan amount is $15,000 Nominal interest rate is 11% Loan repayment in 1 year

Q: You have approached Which Bank for a loan to buy a house. The bank offers you a $400 000 loan,…

A: Given Information:Loan amount is $400,000 Interest rate is 9% (compounded monthly) Loan tenure is 20…

Q: Matt borrowed $23,000 at 5.5% compounded semi-annually. If the loan is to be repaid in equal…

A: Loan is contract between lender and borrower where lender provide funds to borrower that is repaid…

Q: Jackson has a loan that requires a $16,600 lump sum payment at the end of four years. The interest…

A: The amount borrowed today can be computed using the present value function.

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: 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: Excellent bank has offered you $40,000, 30-year loan to purchase an equipment in your Factory. The…

A: A = P1+r100n Where  A = Amount P = Principal r = Rate of interest n = Number of periods

Q: Assume you take a loan of $10,000 with interest of 5%/year compounded yearly. You intend to pay it…

A: First, determine the monthly payment of the loan using the Excel PMT function where the ‘RATE’ is…

Q: You have taken out a 20-year loan of $72,000 with 3% interest (APR) compounded monthly and with…

A: Annual percentage rate (APR) is a rate that a person is paying annually after undertaking all the…

Q: Using the Add-On Method, calculate the monthly payment for a $ 8,500 loan that is borrowed for 3…

A: Under Add-on method, total interest will be calculated considering the simple interest formula and…

Q: You deposit $1,000 in an account at the Lifelong Trust Savings and Loan that pays 2% interest…

A: Future value (FV) refers to a means of estimating how much an asset or cash's present value (PV)…

Q: A man is paying 100,000 at the beginning of each month at a rate of 12% compounded monthly. If the…

A: Present Value of Annuity due refers to the value today of the series of the predetermined amount of…

Q: Ali took a loan of 180000 to buy an apartment the bank offered the loan with an apr of 16 compounded…

A: Amount of Annuity "A" is 31,280 Total number of annual payments are 30 Loan amount is 180,000…

Q: Find the interest paid on a 30-year loan of $350,000 at an annual interest rate of 6% compounded…

A: Monthly payments are made to amortize a loan taken. It includes a principal repayment and interest…

Q: Suppose you are thinking of availing a loan of P100,000 at Pag-ibig Funds for house repairs after…

A: A loan refers to the borrowed amount taken by a person from the lender in case of a shortfall of…

Q: You are about to borrow $8,000 from a bank at an interest rate of 8% compounded annually. You are…

A: The money which is taken as a loan from the bank or from any financial institution is known as…

Q: Find the periodic payment for Alyssa's loan of $100,000 that has an annual interest rate of 5.5%…

A: We need to use the following formula for amortization of loan by paying monthly installments PMT…

Q: Assume that you will have a 10-year, $20,000 loan to repay when you graduate from college next…

A: Note: As per the Policy, We’ll answer the first question since the exact one wasn’t specified.…

Q: You are working for a finance firm and a client comes to you and wants to know how much money they…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: Use the appropriate formula to find the amortization payment you would need to make each three…

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

Q: Jason's loan for $8500.00 is repaid by equal payments of $525.00 that are made at the end of every…

A: The formula for effective rate is: i=q1+rmmq-1Where, q is the new compounding and m is the old…

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: Jonathan wishes to borrow $180 000 from a commercial bank. He was told that the loan would be…

A: Loan amortization:  The schedule of periodic payments for a loan is known as loan amortization, and…

Q: Suppose that you would like to have $25,000 to use as a down payment for a home in five years by…

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: If you borrowed S 15,000 to be repaid in 20 equal quarterly payments and after your 10th payment you…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: what will be your monthly​ payment?

A: Sum of money borrowed if not paid immediately, then over a period of time as per agreement is…

Q: How much interest is paid in the third year? How much total interest is paid over the life of the…

A: Loan: It is the sum of money given to the borrower by the lender for a period of time. In return,…