Answered: How much money did he borrow?

Business

Finance

How much money did he borrow?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

See similar textbooks

Related questions

Q: A young man saved his money every quarter for 5 years into his bank account. He deposits P2.000 per…

A: Quarterly deposit first 2 years = P 2000 Quarterly deposit next 3 years = P 4000 Annual interest…

Q: Twelve years ago, Pat and Mike took out a $115,000 loan for 30 years at 9.3% interest. Their monthly…

A: Loan = 115,000 N = 360 (30 years in months) Interest rate = 9.3℅ Monthly payment = 950.25

Q: Mark borrowed an amount of 10,865 from Brian and after 3 years, he borrowed again an amount of…

A: Equation of value : It is a concept where a sum of money has different values at different times.…

Q: Ken just bought a house. He made a $15,000 down payment and financed the balance with a 25-year…

A: Monthly Payment (A)=$953 Duration(n)=25*12=300 periods Rate of interest (i)=5.1%/12=0.00425

Q: el started to deposit P5,000 quarterly in a fund that pays 1% compounded quarterly. How much will be…

A: The money grow with time and depending on the interest rate and compounding the future value grow…

Q: Nick saves $175 per month, deposited directly into his credit union account on payday, the last day…

A: In order to calculate the amount at the end of a specific period of time, the future value of the…

Q: Joshua borrowed $800 for one year and paid $40 in interest. The bank charged him a service charge of…

A: Annual Percentage Rate (APR) is the actual annual cost incurred by the borrower on the amount…

Q: Billy borrowed an amount of money from Kat. He agrees to pay the principal plus interest by paying…

A: Annual payment = P 38,973.76 Period = 3 Years Annual interest rate = 8% Quarterly interest rate =…

Q: Joan borrowed $18,000.00 to buy a car. She repaid $4700.00 three months later and $8300.00 nine…

A: If enough funds are not available with a person for a transaction, then the person can avail credit.…

Q: Anthony invested a sum of money 2 years ago in a savings account that has since paid interest at the…

A: Solution: FV = $25,789.88 r = 2%/ year n = 2 year Since, rate is compounded quarterly; number of…

Q: If Phil borrows $40,000 from a loan company at an interest rate of 6.5% per year compounded weekly,…

A: Here, Loan amount = $40,000 Quarterly payment of the loan = $800 Interest rate = 6.5% compounded…

Q: Tom borrowed money from a credit union for 6 years and was charged simple interest at an annual rate…

A: The loan is the sum of money borrowed by the borrower from the lender, where the borrower agrees to…

Q: Joe wants to have $10,000 in 10 years after investing in an account that earns 3.6% compounded…

A: Future value required (FV) = $ 10,000 Annual interest rate = 3.6% Monthly interest rate (r) =…

Q: Darien invests $10,000 in an account that pays 3.2% interest per year, compounded semi-annually.…

A: The amount of money can be calculated as future value of the principal amount.

Q: Mr. Jones borrowed P150,000 two years ago. The terms of the loan are 10% interest for 10 years with…

A: The money can be raised by borrowings in the form of loan. The loans can be obtained from the banks,…

Q: Ashea Smith is a 22-year-old senior who used the Stafford loan program to borrow $4,000 four years…

A: The annual payment amount can be calculated. But the first step is to calculate present value of all…

Q: What is the interest on interest if interest is compounded

A: Calculate the compound interest amount as follows:- Total amount after 3 years =P x (1+R/100)n…

Q: You borrowed $5,646 from a bank, which charges 7.8% interest per year. How much interest did you owe…

A: Principal amount (P)= $5,646 Interest rate (R)= 7.8% per year Time period (T)= 1 year

Q: how much interest will mico pay

A: PV = A[ (1-(1/(1+r)^n)/ r] Where PV = present value, A = Annuity amount. r = interest rate. n =…

Q: Fred owes $12000 due in two years and $8,000 due in twelve years. Fred is allowed to pay off both…

A: We have to consider present value and future value of both.

Q: Peter is saving $5,000 monthly deposit into an account that pays 7% compounded monthly. What would…

A: Monthly deposit (P) = $ 5000 Interest rate = 7% Monthly interest rate (r) = 7%/12 =…

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

A: 1) Computation:

Q: Mr. Velasco got a 700,000 loan for the expansion of his business payable monthly in 4 years. How…

A: Determine the monthly amortization using the Excel PMT function with the following inputs: RATE = 1%…

Q: Joe borrowed $100,000 from a local bank, which charges him an interest rate of 7% per year. If Joe…

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

Q: Rapi Tulpo invests Php1,000 in a Bank that doubles his money in five years. To what annual interest…

A: Investment means an asset(financial assets or fixed assets) that is purchased to generate additional…

Q: Mr. Sin borrowed ₱1,000,000 for the expansion of his business. How much will be the yearly payment…

A: The regular payments to be made for the loan taken can be calculated using the PMT function in…

Q: Brian borrows $ 7500 from his friend at an annual 6% interest rate, which he will pay five years…

A: Future value is the value of the present cash flows after certain period. Due to interest that can…

Q: Avishek has an interest only loan for $100,000.00 maturing in 9 years. The interest rate on the loan…

A: Calculate the quarterly rate as follows: Quarterly rate =(1+Biweekly rate)264-1 Quarterly rate…

Q: Frank borrowed $200 from a lender that charged simple interest at an annual rate of 9%. When Frank…

A: Simple interest is the additional amount paid on the amount of principal borrowed for a specific…

Q: In 6 years Harry and Sally would like to have $24000 for a down payment on a house. How much should…

A: In this question we need to compute the each month deposit to have $24000 for down payment in 6…

Q: When Christian bought his home, he borrowed $315,700 at 4.2% interest, compounded monthly for 25…

A: Loan amount (PV) = $315,700 Interest rate = 4.2% Monthly interest rate (r) = 4.2%/12 = 0.35% Period…

Q: Joshua borrows 35,000 pesos from a cooperative to buy a laptop. He will repay the loan in equal…

A: Borrowing refers to the act of taking money from another party with known intention to repay that…

Q: If his new interest rate is 5% per year compounded monthly, what will be his new monthly payment?

A: When a loan is borrowed by a person, It becomes his obligation to pay the installment amount every…

Q: Heidi deposits $8,000 in a savings account that earns 4.5% interest, compounded quarterly. How much…

A: This question is from time value of money. It is the concept that money you have now is worth more…

Q: Jack borrowed $12,000 from a bank for 3 years at 15% interest annually. What is the total…

A: Simple interest is the fixed rate of interest which is paid or payble on amount borrowed. It is…

Q: Benito borrowed $800 two years ago. The interest rate on the loan was 5% compounded monthly for the…

A: Borrowed Amount is $100 Borrowed two years ago Interest Rate is 5% compounded monthly for first 8…

Q: Carlos purchased a house for $230,000; he paid $11500 as a down payment and financed the balance…

A: Value of House is $230,000 Down Payment is $11,500 Therefore, Loan Amount is : =$230,000-$11,500…

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: Benjamin wants to have $12,000 in 15 years after investing in an account that earns 4.2% compounded…

A: Future Value or Amount that Benjamin wants is $12,000 Time period is 15 years Interest rate is 4.2%…

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

A: To calculate amount borrowed when monthly payments are given, present value of annuity formula will…

Q: Julian won the lottery. He deposits some of his winnings into an account earning 2.75% interest…

A: Interest rate = 2.75% Deposits = $25,000 Time period = 5 years Quarterely payments = $1,000…

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: Mr.Sarwar wants to save $2000 after every 6 months in a financial institution, which pays him…

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

Q: Travis invested $8000 in an account that pays 4 percent simple interest. How much more could he have…

A: Investment = 8000 Simple Interest Rate = 4% N = 7

Q: Last year, Charlie had $30,000 to invest. He invested some of it in an account that paid 10% simple…

A: Simple interest is one of the methods of calculating interest in which interest is calculated only…

Q: Caitlyn has 50,000 in a bank which he invests at 8% compounded semi-annually. What semi-annual…

A: Answer: Calculation of the amount of semi-annual withdrawals for 3 years (Let "P") Formula, we will…

Q: This year 10 years after you first took out the loan, you check your loan balance. Only part of your…

A: Value of house today is sum of loan and interest to paid So interest plus loan is value of house…

Q: Daryl borrowed $5,440 for 4 years. If the loan's annual simple discount rate was 4.1%, how much did…

A: Amount borrowed (P) = $5,440 Time (T) = 4 years Rate (R) = 4.1% Total amount to be returned =…

Concept explainers

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.

Question

Ricky borrowed some money 7 years ago. He now owes $10,715.38. His loan was charging him 2.5% compounded quarterly. How much money did he borrow?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Daryl borrowed $5,440 for 4 years. If the loan's annual simple discount rate was 4.1%, how much did he have to return?
kyle borrowed cash 5 ywars ago and is due to pay 750 pesos with an annual simple interest of 10% . how much did he borrow? how much would you need if he could onlybpay back after 5 more years?
Irmgard borrowed ¢7 million from her friend at a rate of 21% converted monthly 2 years ago. If no interest has been paid, how much will be needed to pay off the loan in three years’ time
Val bought a car for $48,000, putting down $15,000 cash and financing the remainder. How much are his annual car payments if he financed the car for 5 years and paid an annual interest rate of 6 percent? answer is 7,834.08 How much would be his annual payments if he made payments at the beginning of each year? answer is 7,390.64
Joe has $1,500 in credit card debt but pays it in full every month from cash flow. He also pays her mortgage from cash flow ($2,000 principal). For savings, Joe saves $50 per month in an interest-bearing savings account. Annual interest earned and reinvested is $100. How much will his net worth increase in the current year?
Travis invested $8000 in an account that pays 4 percent simple interest. How much more could he have earned over a 7 year period if the interest had compounded annually?
Benito borrowed $800 two years ago. The interest rate on the loan was 5% compounded monthly for the first 8 months and 9% compounded quarterly for the rest of the time. How much does he owe now?
Larry borrowed $1,000 through a loan shark, two years later he ended uppaying $1,500 to settle his debt. What was the interest rate on his loan?
Mark borrowed an amount of 10,865 from Brian and after 3 years, he borrowed again an amount of 7,750. He paid 2,885 one year after the last borrow, 4,056 the following year, and 3,414 the year after. The money is worth 11.528% compounded semi-quarterly. a) what ammount should he pay as an equivalent single lump sum at the end of 8 years to discharge all his debt? b) what amount should he pay at year 8, 9 and 10 equally discharge all his debts?
Joshua borrowed $800 for one year and paid $40 in interest. The bank charged him a service charge of $7. If Joshua paid the $800 in 12 equal monthly payments, what is the APR?
Jack borrowed $12,000 from a bank for 3 years at 15% interest annually. What is the total interest he paid in 3 years?
Camille Noah is investing $5,000 in an account that pays an annually compounded rate of 6.75 percent for three years. What is the interest on interest if interest is compounded?