For her son's tuition fee, Maria borrowed 10,000 pesos from a lending company with annual simple interest rate of 8.4%. If she had not given any interest in the first year, how much should she pay the company to pay off her debt after 2 years?

Q: Gabriela wants to withdraw $5,000 from her account at the end of 5 years, and $7,000 at the end of 6…

A: Since Gabriela wants to withdraw a specific amount after a certain period of time, thus, it is…

Q: Imelda took a loan of Php 950,000 from a financial institution to purchase a TV. If the company…

A: Compound Interest is also called interest on interest. It is the addition of interest in the…

Q: On June​ 1, Mia deposited $3,800 in an MMDA that pays 4​% interest. On October​ 31, Mia invested…

A: The amount earned on any deposits is the sum total of interest earned taking into consideration the…

Q: Patricia has borrowed an amount of Sh. 4 million to start a boutique business in Kileleshwa . The…

A: A loan amortization schedule is used to indicate the amount of principal and interest paid for each…

Q: Lupe made a down payment of $8000 towards the purchase of a new car. To pay the balance of the…

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

Q: A woman deposits $10,000 at the end of each year for 14 years in an account paying 7% interest…

A: Future Value of Ordinary Annuity refers to the concept which gives out the compounded or future…

Q: Jean borrowed $3600 from the bank in order to buy a new piano. She will pay it off by equal payments…

A: Interest-  The monetary payment for the privilege of borrowing money is known as interest, and it is…

Q: Salma borrowed $600from a bank for 2 years and was charged simple interest. The total interest that…

A: The annual interest rate on the loan is calculated using the simple interest formula given as below:…

Q: To pay for a  $22,300  truck, Jina made a down payment of  $4900  and took out a loan for the rest.…

A: As per the information provided : Jina to pay $22,300 for a truck. She made a down payment of $4,900…

Q: Jino sold his house. In addition to cash, he took a mortgage on the house. The mortgage will be paid…

A: Present value is also known as a present discounted value, in which the future value of cash inflows…

Q: On the first day of the year, a woman deposits P50,000 in a bank at 10% per year, compounded…

A: Given, Principal amount (P) = P50,000 Rate of interest (r) = 10% Compounded = Annually Withdrawn…

Q: Starting on July 1, 2000, Peter borrows $8,400.00 each year for 4 years from his dear Aunt May to…

A: Loan amount = $8,4000 Time period = 4 years Interest = 9% compounded semi-annually  Installment = 20…

Q: On April 1, year 1, Mary borrowed $220,000 to refinance the original mortgage on her principal…

A: A home mortgage loan indicates the loan secured against a property, generally residential property…

Q: Ms. Ligaya wants to buy her dream car. However, she does not have enough money to pay for ₱5,000,000…

A: Principal amortization means an amount of principal borrowing payment included in the instalment.…

Q: Polly purchased a car. She paid P150,000 as down payment and pays P5,500 at the end of each month…

A: Polly purchased a car and paid ₱ 1,50,000 as the down payment and thereafter pays ₱ 5500 at the end…

Q: Suzanne opens a line of credit at a local bank, and immediately borrows 1510 dollars. 5 months…

A: Line of credit is a type of bank account which allows business to borrow a certain amount of money…

Q: While buying a new car, Aaron made a down payment of $800 and agreed to make month-end payments of…

A: Mortgage/ Borrowings Borrowings are the loan which is taken by the individual to meet its financial…

Q: Jane requested a loan from a bank amounting to P405,630 to continue her small business. But she only…

A: Given: Maturity Value "M" = P405630 Proceeds = 83.84%*P405630 = P340080.192 Number of years = 12…

Q: Jack has borrowed money from his financial institution, and has agreed to pay $200 at the end of…

A: 1) Computation:

Q: Peggy made a down payment of $400 toward the purchase of new furniture. To pay the balance of the…

A: Purchase price of the furniture is present value of monthly payments plus down payments

Q: Max borrows $15,500 for her last 2 years of college, acquiring a federal student loan at 8%…

A: Federal student loans, also known as government loans, allow students and their parents/guardians to…

Q: Nona purchased a new car earlier today for $32,000. She financed the entire amount using a five-year…

A: GIVEN, R = 3% LOAN AMOUNT = $32000 N= 5 YEARS = 60 MONTHS PMT = P×R12×1+R12N1+R12N-1PMT =…

Q: Mariah applied for a loan in a bank that gave 10, 000 pesos monthly payment for 2 years. The first…

A: The present value of an annuity is the current value of the future payments that are calculated…

Q: Kristen purchased a car for $43,000; she paid $2150 as a down payment and financed the balance…

A: Using excel NPER and PMT function

Q: Ali deposits BD 2,500 in a savings account that pays interest at the rate of 5.5% per year,…

A: Amount is the sum of the initial principal amount and interest accumulated on it during the time…

Q: While Kate was a student at SA University, she borrowed $16,000 in student loan at an annual…

A: The concept of the present value implies that the money today is  having more worth  than the money…

Q: Maria agreed to pay Php100,000.00 down payment and Php 50,000.00 bi-monthly installments for the car…

A: The term loan is a financial term that represents the amount borrowed by one person from another.…

Q: a) Find Kareem's monhly payment b) If Kareem pays the monthly payment for each month for the full…

A: Loan (mortgage) amortization schedule refers to a schedule which is prepared to shows the periodic…

Q: Marcy borrowed P1M in a bank that charged 18% compounded monthly and agreed to make monthly payments…

A: Monthly Compounding: It is the interest of interest to the principal sum of a loan or deposit and…

Q: After four years in college, Josie owes $104000 in student loans. The interest rate on the federal…

A: Let the amount in federal loans be "$X" , therefore amount in private bank loans would be…

Q: Patricia promises to pay Patsy $2400.00 plus interest at 8% in one year. After 3 months passed, she…

A: Time has been valuable in all aspects but in terms of finance, time has a money value. The worth of…

Q: Aretha ran up $38,800 on her credit card, which charges 13.95%. If she decides to cut up her card…

A: A stream of equal cash flows (CF) paid or received periodically is termed as annuity. Annuity is…

Q: Sandra borrows $25, 000 from her parents to help pay college expenses. She agrees to repay the loan…

A: Given: Loan amount “PV” = $25000 Interest rate “r” = 3%/12 (compounded convertible) End of month…

Q: Lauren purchased a car for $53,000; she paid $13250 as a down payment and financed the balance…

A: The loan amount would be the difference between the car price and the down payment.  Total Interest…

Q: if her dad deposits R3570,00  at the end of every six months for the next four years into a bank…

A: The Future Value of the annuity is the total value of all the payments which is occurred regularly…

Q: Irmgard borrowed ¢7 million from her friend at a rate of 21% converted monthly 2 years ago. If no…

A: Loan is a contract between lender and borrower where lender provide funds to borrower for definite…

Q: Lamis borrowed OMR 10,000 from Bank Muscat with an interest rate of 5% for 3 years. The amount she…

A: The amount that has to pay after three years is the sum of principal and compound interest on the…

Q: How much must Riley have in the account for Scott to receive the $220 payments for 5 years? If Riley…

A: A stream of equal cash flows paid or received periodically is termed as annuity. Annuity is either…

Q: Polly purchased a car. She paid ₱150,000 as down payment and pays ₱5,500 at the end of each month…

A: Down payment (D) = ₱ 150000 Monthly installment (M) = ₱ 5500 n = 48 months r = 7.8% per annum =…

Q: Sarah secured a bank loan of $200,000 for the purpose of purchasing a home. The mortgage is to be…

A: Calculation for remaining balance for repaying loan after 5 years is shown below: Hence, the…

Q: Rita borrowed $4000 from a bank for 5 years and was charged simple interest. The total interest that…

A: Loan amount = $ 4,000 Period = 5 Years Interest amount = $ 1,600

Q: How much money did he borrow if the interest is 8% compounded quarterly ?

A: Principal amount is the amount initially invested in a deposit account or the net amount borrowed by…

Q: . A father borrows P10,000 for the enrolment of his son in college last August. He agrees to pay the…

A: Given, the interest rate is 9% compounded monthly. Number of months is 4. Sum borrowed is P10,000.…

Q: A woman deposits $10,000 at the end of each year for 14 years in an account paying 7% interest…

A: Future Value of Ordinary Annuity refers to the concept which determines the sum total of all the…

Q: Grandma Riley wants to help Scott while he's in college by giving him a S220 monthly allowance for 5…

A: Time Value of Money:The time value of money is the idea that the value of money received today will…

Q: An individual deposited P35,000 and earns 3% interest compounded quarterly. After six years, how…

A:

Q: Cathy borrowed $24,000 to buy a new car and expects to pay $400 per month for the next 3 years to…

A: Compound interest is also interest on interest that is the interest which is accumulated on the…

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.