Find the present value of the following annuities. Assume the discounting occurs once a year A. The customer agreed to pay rent at the end of each year and the landlord charges $21,600 per year . The required rate of return of the landlord is 6.85%. The rent contract will last for 7 years Required: Find the present value of this agreement for the landlord B. A customer approached a car sales agent and makes a car lease agreement for 6 years. The cash flow [annual] is $6000. The agent charges 7.2% interest on such contract Required: How much will be the present value of such an agreement ?

Q: (a) What is the amount (in $) of the monthly principal and interest portion, PI, of Michael's loan?…

A: Cost of condominium = $67,000 Time period = 30 years Interest rate = 5% Down Payment = 20%

Q: For the car loan described, give the following information. A car dealer will sell you the $30,750…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: You purchase a cottage for $190,000. You obtain a 30-year, fixed rate mortgage loan at 12.0% after…

A: Loan amortization is the process of reimbursement of loan periodically by the borrower of the loan…

Q: To start your business, you take a loan of $20,000 at 6.25 % compounded semi-annually. You want to…

A: Requirement : Question 1C Loan = 20,000 Interest rate = 6.25℅ compounded semi annually Annual loan…

Q: In order to buy a vacation home, Neal and Lilly took out a 20-year mortgage for $220,000 at an…

A: Monthly mortgage payments or EMI simply means the monthly loan payments made for the loan. A monthly…

Q: What monthly payment will she be required to make if the car is financed over a period of 24 months?…

A: Loan Monthly Payments: These are payments made by the borrower to the lender for the purpose of…

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: Richard Miyashiro purchased a condominium and obtained a 30-year loan of $196,000 at an annual…

A: Mortgage payment can be calculated by using this equation  PMT =PV*i1-1(1+i)n Where PMT= Annual…

Q: After deciding to acquire a new car, you can either lease the car or purchase it with a three-year…

A: Lease is a way to get the asset for a fixed time period by paying periodicals payments to other…

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: In order to buy a car, you borrow $25,000 from a friend at 12%/year compounded monthly for 4 years.…

A: a.

Q: An auto dealer agrees to sell a used car for $1,000 down and payments for 3 years at $550 per month.…

A: according to the question given, downpayment = $1000 monthly payment (A) = $550 interest rate (R) =…

Q: Suppose you are a property owner and you are collecting rent for an apartment. The tenant has signed…

A: The present value is the equivalent value today of future payments to be received in the future…

Q: A store sells a washing machine. Renier offers to give a down payment of P5,000 and pay $2,000 at…

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

Q: You have recently graduated and intend to settle down. Your current salary is $60,000 per annum and…

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

Q: You are interested in leasing a car for $425 per month, due at the beginning of each month. Using an…

A: The present value of lease payments calculates the present worth of monthly lease payments. It is…

Q: The Corner Bar & Grill is in the process of taking a 5-year loan of $50,000 with First Community…

A: Amortization Schedule:-It is a schedule prepared for the loan installments which divide into the…

Q: Use a banker's year described above to answer this question. To complete the sale of a house, the…

A: Simple Interest: It is the interest charged on loan/savings account . Calculation: Daily interest is…

Q: n financing a new shopping center, the owner receives a loan of P1M at the beginning of each 6…

A: Deferred annuity refers to a contract payment wherein the account holder is promised to receive a…

Q: An office equipment representative has a machine for sale or lease. If you buy the machine, the cost…

A: Option (d). 16% is the correct answer

Q: a certain loan was arranged such that Dino will pay ₱5,500 every month for the first 7 months; no…

A: Present value, usually referred to as discounted value, seems to be a financial computation that…

Q: The price of a new car is $36,000. Assume that an individual makes a down payment of 25% toward the…

A: The loan which is paid-off by making installment payments having two components as interest mount…

Q: You have reached an agreement with an auto dealer regarding a new car. She has offered you a…

A: A loan is an agreement where an amount is forwarded in exchange for interest being paid as well…

Q: Mrs. Jenny bought an upper-class lot costing 1.23 Million $. The car agency asked for a downpayment…

A: Cost of upeer class lot is 1.23 million $ Downpayment is $320,200 Payment after one year is $624,400…

Q: An individual makes rental payments of $1,200 per month and wants to know the present value of their…

A: Present value is the value which is defined the value today for periodic deposits or the future…

Q: The price of a new car is $36,000. Assume that an individual makes a down payment of 25% toward the…

A: Ordinary annuity are the PMTs which are made at the end of the period.

Q: You are to pay a bill in Meralco every month for 5 years. The accumulated amount of the payment you…

A: If someone paid an equal amount in the difference of equal interval then it is classified as the…

Q: Use the following information to answer the next three questions below: You buy a house on July 1.…

A: Laon amortization schedule means where repayment during the life of loan is written with interest.

Q: The Fly-by-Night finance company advertises a “bargain 6%plan” for financing the purchase of…

A: Effective interest rate is the rate that is paid to a loan or earned on an investment as a result of…

Q: You have just purchased a new warehouse. To finance the purchase, you’ve arranged for a 31-year…

A: The annual interest rate that is charged by the lenders or at which the investors earn additional…

Q: The price of a new car is $32,000. Assume that an individual makes a down payment of 25% toward the…

A: Cost of car = $32,000 Down Payment = 25%  Interest Rate = 6% compounded monthly Loan amount = Cost…

Q: Manjean is making car payments of $662 per month for the next 3 years. Manjean knows that the car…

A: Formula Car price = P*[1-(1+I)-N]/I Where P - Monthly payment i.e. $662 I - Monthly interest rate…

Q: You are considering purchasing a lot adjacentto your laundry business to provide adequate parking…

A: Initial Loan amount=$ 75,000 Period % of initial amount to be repaid Repayment amount ($) 1 14…

Q: In August​ 2008, a car manufacturing company was offering the choice of a 3.3​% loan for 72 months,…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: A car was purchased for $6400.00 down and payments of $445.00 at the end of each month for 6 years.…

A: The outstanding loan amount at any point in time will be the present value of the remaining monthly…

Q: Johan wants to buy a car on hire purchase for N$49000 at the rate of 12% p.a. repayable using…

A: Payment of loan installments are based on the concept of compounding and time value of money. Here…

Q: For the car loan described, give the following information. A car dealer will sell you the $30,350…

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

Q: A friend purchased a new sound system that was selling for $4200: He agreed to make a down payment…

A: The series of payments discussed here is a form of annuity where the fixed amount of cash flow is…

Q: An individual wishes to purchase a house that is selling for $200,000. The person has $50,000 they…

A: Value of house = $200000 Down payment = $50000 Term for amortization "n" = 10 years or 10*12 = 120…

Q: Assume you bought a car using a loan that requires payments of $3,000 to be made at the end of every…

A: Present value of annuity due is calculated to determine the total present worth of the annuity paid…

Q: Johan wants to buy a car on hire purchase for N$75000 at the rate of 10% p.a. repayable using…

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

Q: An engineer wants to purchase a used car for $15,000. The dealer offered to finance the deal at…

A:

Q: John obtained a loan of $25,000 at 4.6% compounded monthly. How long (rounded up to the next payment…

A: Loan amount = $25,000 Interest rate = 4.6% Monthly payment = $2,810

Q: A consumer faces the following decision. She can buy a computer for $1050 and pay $10 per month for…

A: To compare the alternatives, total present value of cost of computer will be calculated. Present…

Loans

A loan is a term that we are all familiar with. The processing of loans is one of the most important functions of a bank. It keeps our economy stable and facilitates the implementation of monetary policies. Let's take a look at the different forms of loans and get some answers to some common questions.