Henry Fuller has agreed to purchase a used automobile for $13,500. He wishes to limit his monthly payment to $350 for a period of 2 years. What down payment must he make to complete the purchase if the interest rate on the loan will be 6%?

Q: Karen takes an 8-year car loan of $50,000 at 2.14%, compounded monthly. If the payments are done at…

A: Monthly Compounding Loan Amount = 50,000 Time Period of loan = 8 years or 96 months Interest rate =…

Q: Sam took a $5000 loan to build a deck in the backyard. The loan requires payments at the end of each…

A: Converting rate of interest from 9% compounded monthly to quarterly   Effective rate of interest =…

Q: Joan Tanaka borrows $80,000 at 14 percent interest toward the purchase of a vacation home.Her…

A: Given: Loan amount = $80,000 Interest rate = 14% Years = 25

Q: John Doe has just been offered a home loan towards purchase of house that is being sold for…

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

Q: Bernie purchased a riding lawn mower for $1,320. The store offered him a 3-year add-on loan at an…

A: Computation:

Q: Taylor Swift, a college student of USEP decides to get a student loan amounting to $4,000 with an…

A: Amortized Loan:  Amortized loan is a type of loan in which the borrower would pay periodic payments…

Q: Ms. Anderson plans to purchase a home for $300,000. She intends to pay 20% of the purchase price as…

A: A written agreement through which a lender gets the right to take the property that is put as a…

Q: Stan Slickum has a used car that can be bought for $8,000 cash or for a $1,000 down payment and $800…

A: Given information: Payment is $800, Purchase price is $8,000 Down payment is $1,000 Number of months…

Q: Ralph has just borrowed 1200 dollars to purchase a new stereo, at a nominal rate of interest of 12.2…

A: Here, Borrowed amount is $1,200 Interest rate is 12.2% Compounding period is Monthly i.e 12 Monthly…

Q: Pedro buys a condo for $629,000, with a down payment of $40,000. He takes out a 30-year mortgage for…

A: Loan amount (P) = $589,000 Monthly interest rate (r) = 0.0025 (i.e. 0.03 / 12) Monthly period of…

Q: When you purchase your car, you take out a five-year annual-payment loan with an interest rate of…

A: Here we will first have to determine the amount of loan taken. We are provided with annual payments,…

Q: 1. Nelson wants to buy a car that costs $42,000. He has arranged to borrow the total purchase price…

A: Using the PMT function in excel

Q: Ken is paying P2,500 every 3 months for the amount he borrowed at an interest rate of 8% compounded…

A: Answer: Calculation of the amount that Ken borrowed: The amount that Ken borrowed will be equal to…

Q: ictor received an 8-year subsidized student loan of $22,000 at an annual interest rate of 4.85%. If…

A: The question gives the following information:

Q: Larry has decided to take out a loan for college. He expects to graduate 5 years and 6 months later…

A: Interest rate is the rate of interest earned/paid on an investment/loan. The interest will be paid…

Q: Mr. Abdullah borrows $80,000 at 14 percent interest toward the purchase of a home. His mortgage is…

A: A term loan is a form of credit instrument in which money is lent to someone else in exchange for…

Q: Emilio desires $9,000 as the proceeds of a 90-day loan from Winston who charges 5% interest in…

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

Q: James received a 15 year loan of $230,000 to purchase a house. The interest rate on the loan was…

A: Working Note #1 Loan amount ($) 230000 N (years) 15 Period 180 Rate(Compounded annually)…

Q: Greg Brown borrowed $100,000 to purchase a house. He agreed to repay the loan with equal monthly…

A: Installment amount is the number of periodic payments necessary to repay a loan.…

Q: If Marc obtained a business loan of $225,000 at 4.77% compounded semi-annually, how much should he…

A: Solution:- When a loan is taken, it is either paid back in lump sum mode or installments. In…

Q: For a 2-year projeet, Haya plans to open a small hand-made crafts shop. She estimates that it will…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Q: Reggie availed of a deferred payment scheme from a bank that gave her an option to pay ₱5,500…

A: solution given Monthly payment 5500 Rate of interest 12% annual Compounding…

Q: Juan took out a $20,000 loan for 146 days and was charged simple interest. The total interest he…

A: We need to use simple interest formula to solve this problem Simple interest =Principal*Rate*Time

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: Pedro borrows P300,000.00 from lender  ABC today at 12% compounded monthly.          To fulfill his…

A: As you have asked a multiple subpart question, we will answer the first three subparts for you. To…

Q: find the simple interest rate

A: Interest charged on the principal amount at a fixed rate for a fixed period of time is known as…

Q: and you cannot cancel on the due date, so you must cancel with a delay of 25 days, it is requested:…

A: Interest is the fee paid to a lender for using the funds. It is the compensation paid to an investor…

Q: Andrea is arranging a $90,000 mortgage loan from her bank. The mortgage is to be amortized by making…

A: Mortgages is a loan contract used by persons to buy capital assets such as house on debt. Mortgages…

Q: Larry wants to make a decision on a six- year amortized loan for him to buy a new car. The value of…

A: It will be enough if the present value of monthly payment of $700 is equal to or more than the car…

Q: Samuel Ng received a 3-year subsidized student loan of $15,000 at an annual interest rate of 4%.…

A: Given that: Loan Amount (A)= $15000 Time(t)= 3 years Number of payments per year (n)= 12 Annual…

Q: Mary, a college student, needs to borrow $8,000 today for her tuition. She agrees to pay back the…

A: Initial amount is $8,000, Number of years is 4, Interest rate is 3.85%

Q: Juancho is required to pay P1,800 at the beginning of each quarter for the next 3 years for his…

A: Due to compounding the interest on the increase with increase in compounding. So effective rate 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: Todd Foley is applying for a $290,000 mortgage. He can get a $2,030 monthly payment for principal…

A: Calculation of number of months:Excel spreadsheet for calculation of number of months

Q: Todd is able to pay $360 a month for 6 years to finance a car purchase.  a. If the interest rate is…

A: Per month payment=$360Number of months=6×12=72Rate per month=6% compounded monthly

Q: Samuel Ng received a 3-year subsidized student loan of $12,000 at an annual interest rate of 5%.…

A: Computation of monthly loan payments:

Q: Kelly buys a computer system for $2400 and makes a 15% down payment. If Kelly agrees to repay the…

A: Annual Percentage Rate is the internal rate of return for the loan borrowed and monthly payments…

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: Sebastian checks Daniel’s credit rating and determines that he will qualify for a 4% auto loan, and…

A: Cost of the car = $39,900 Trade-in Value = $8,500 Loan Amount = $39,900-$8,500 = $31,400 Years = 4…

Q: Michelle Passmore is purchasing a $25,000 automobile, which is to be paid for in 60 monthly…

A: A loan is an agreement between two parties where a sum is forwarded in exchange for periodic…

Q: Gunther has to pay a loan he took out after a term of 5 years. If the principal amount is at $215…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: Louie borrowed $2,000 from Phil. Under this agreement, Louie would repay with $1,200 at t = 1 and…

A: The annual interest rate will be the annualized cost of borrowing. The yield will be the actual…

Q: Joe is settling his debt by paying P50,000 at the beginning of every 6 months for 3 years. If the…

A: Semi annual payment = P 50,000 Period = 3 Years Number of semi annual payments = 3*2 = 6 Annual…

Q: Paul obtains a 30-year loan at an annual 7.4% on a $250,000 house where the required down payment is…

A: Given: Years = 30 Interest rate = 7.4% Cost of house = $250,000 Down payment = 15%

Q: Jason received a 10-year non-subsidized loan of $40,000 at an annual interest rate of 6%. What are…

A: Loan amount refers to the amount that is borrowed by the borrower for fixed time period at fixed…

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: Mr. Nina borrows $425,000 from the bank at 3.5% per year interest over a 30-year period. He can make…

A: Amount borrowed = $425000 Interest rate = 3.5% Period = 30 years  Monthly payment = $1400

Q: Ms.Sue was selling a house for a cash price of 5 million pesos but agreed to have it paid on monthly…

A: Price (PV) = P 5,000,000 Interest rate = 4% Monthly interest rate (r) = 4%/12 = 0.333333333333333%…

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.