Jane bought a $3,000 audio system and agreed to pay for the purchase by making nine equal annual installments beginning one year from today plus a lump-sum payment of $1,000 at the end of 10 periods. The interest rate is 10%. What is the required annual installment?

Q: Jane bought a $3,000 audio system and agreed to pay for the purchase in 10 equal annual installments…

A: Calculate the interest rate implicit in the agreement.

Q: Miguel purchased a hot tub costing $5,070 by taking out an installment loan. He made a down payment…

A: Given: Hot tub cost = $5,070 Down payment = $1,300 Finance = 24 months Payments each month = $179.77

Q: Leslie borrowed $25,000 at a rate of 6% compounded monthly (j12) for a term of 10 years. Calculate…

A: The loan is repaid in equal monthly instalments. Each instalment has interest and a portion of the…

Q: A $300,000 mortgage at 5.8% compounded semiannually requires monthly payments that were calculated…

A: Loan amount (L) = $300000 Interest rate = 5.8% semiannually compounded n = 25 years = 300 payments…

Q: A man paid a 10% down payment of 200,000 for a house and lot and agreed to pay the balance on…

A: Cost of house = 200,000 Down payment ratio = 10% Loan amount (PV) = Cost*(1-Down payment ratio)…

Q: Juan borrows $25,000 at 7% compounded annually. If the loan is repaid in five equal annual payments,…

A: What are installments? Installment is the sum of money to be paid in a particular time frame to pay…

Q: Ten years ago, Mike took out a 20-year $110, 000 loan at an annual effective rate of interest of 5%.…

A: Loan is financial agreement where a person (lender) lends lump-sum money to other person (borrower)…

Q: Richard borrowed P50,000 as a loan, with an interest of 6% per year, compounded quarterly payable in…

A: Present value of annuity concept is used to calculate quarterly payments.

Q: A man is planning to retire in 25 years. He wishes to deposit a regular amountevery three months…

A: Excel Spreadsheet: Excel Workings:

Q: Tony is converting an RRSP balance of $275,000.00 into a RRIF. Tony wants to receive $1,911.00 at…

A: Time value tells that money received today is of more value than that of receiving the same value…

Q: Miguel purchased a hot tub costing $5,010 by taking out an installment loan. He made a down payment…

A: Annual percentage rate (APR) is the annual cost of funds borrowed. Annual percentage rate is…

Q: Lily purchased a boat valued at $19 000 on an installment plan requiring equal monthly payment for…

A:

Q: 3. Kidoh paid a 12% down payment of P250,000 for a house and lot, and agreed to pay the balance of…

A: Equated monthly instalment is related to payments, and is used to make payments for repaying an…

Q: Eric Coleman invested $2500 four times a year in an annuity due at Southern Trust Company for a…

A: The Future Value of Annuity Due is the total future value of each cash flow which is made at the…

Q: 2) Ahmet bought a new house for 1 100 000 TL and financed 70 percent of the purchase price with a…

A: Monthly Payment refers to the payment that is to be paid monthly for a specific period of time to…

Q: Gilbert got a loan of P100,000 from a local lending agency at 13% compounded annually. Their…

A: Here, Loan Amount is P100,000 Interest Rate is 13% Time Period is 5 years Each successive payment is…

Q: John House has taken a $150,000 mortgage on his house at an interest rate of 6% per year. If the…

A: The annuity refers to the series of cash payments and receipts that finished over a period. The…

Q: A man loans 192,000 and promised to pay for 8 years at an interest rate of 5% compounded annually,…

A: Annual payment can be calculated by using the formula of the present value of annuity.   Present…

Q: Mrs. Castro bought a computer set for Php32,000.00 to be paid equal payments at the end of every…

A: Amortization is a technique used to periodically write down the value of either a loan or an…

Q: Miguel purchased a hot tub costing $5,090 by taking out an installment loan. He made a down payment…

A: Given: Particulars Amount Cost of hot tub $5,030 Down payment $1,300 Payments $173.77…

Q: Jones can deposit $5,000 at the end of each six-month period for the next 12 years and earn interest…

A: Future value of annuity is the future value of the same cash flows that takes place at the end of…

Q: Robert has borrowed $339,000 to purchase a house in the current year at 5.5% interest rate, with a…

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

Q: Jaspreet orignally agreed to make two payments: one of $3,600 due in fourteen months and another…

A: The concept of the time value of money states that the current worth of money is more than its value…

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: Miguel purchased a hot tub costing $5,010 by taking out an installment loan. He made a down payment…

A: A loan is a debt amount borrowed by a person at an interest rate. A borrower of a loan is required…

Q: Miguel purchased a hot tub costing $5,010 by taking out an installment loan. He made a down payment…

A: The APR is used for representing the interest rate paid on the outstanding loan balance. It takes…

Q: You own $35000 from the bank for 3 years at 8.50% annual interest, and you will make equal monthly…

A: Solved using Financial Calculator  PV = 35,000 N = 3years * 12 = 36 I/Y = 8.5/12 = 0.708333 CPT PMT…

Q: Helen is buying a $12,375 car with a $3000 down payment, followed by 36 monthly payments of $325…

A: Given data; Price of car = $ 12,375 down payment = $ 3000 number of payments = 36 monthly payment =…

Q: Sally buys a house. She has limited initial funds, so she agrees to make 360 monthly payments as…

A: Nominal interest rate: It is the rate in which the effect of inflation has not been considered.

Q: Jane bought a $3,000 audio system and agreed to pay for the purchase in 10 equal annual installments…

A: Compute the amount of the annual installment. Amount to be borrowed is $3,000, Rate of interest is…

Q: Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit 2…

A: We need to use present value formula to calculate required deposit now. The equation is PV =FV(1+i)n…

Q: A civil engineering student borrowed P40,000 to meet college expenses during his senior year. He…

A: We need to find the future value at the end of 3 years then use pmt function to calculate equated…

Q: A man is planning to retire in 20 years. He wishes to deposit a regular amount every three months…

A: Annual payments he will receive = $95000 Time period = 18 years  Interest rate = 8% Compounding =…

Q: adam made an investment of $33,000. The investment pays 7.75% p.a. compounded quarterly. He will be…

A: Amount of investment made is $33,000 Interest rate is 7.75% P.A. Compounded Quaterly   To Find:…

Q: Kyle borrowed P100,000 to be paid in 10 years, and established a sinking fund to provide for the…

A: The time value of money plays an important role in the determination of the present worth and future…

Q: Mrs. Parker bought a computer set for $32,000 to be paid in equal payments at the end of every 3…

A: Computer price (PV) = $ 32000 Interest rate = 8% Quarterly interest rate (r) = 8%/4 = 2% Period = 1…

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

A: House cash price (CP) = $ 5,000,000 Period = 5 Years Total number of monthly payments (m) = 5*12 =…

Q: Mike buys a perpetuity-immediate with varying annual payments. The annual payment is $500 for each…

A: Perpetuity is a type of annuity in which payments of equal amounts are made for an infinite period.…

Q: A is planning for her retired life. She has 10 more years of service. He would like to deposit 20%…

A: Present value of Annuity Annuity is a series of equal payment at equal interval over a specified…

Q: Yukihira paid a 10% down payment of P200,000 for a restaurant and agreed to pay the balance of…

A: Payment per period can be calculated using PMT function in excel.   PMT(rate, nper, pv, [fv],…

Q: I borrow a 500,000 at 15% compounded annually, and he agree to pay the loan in 18 equal annual…

A: Loan amount (PV) = 500,000 Interest rate (r) = 15% Number of annual payments (n) = 18

Q: Marissa converted an RRSP balance of $125,000 into an RRIF that will pay he $1,850 at the end of…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: Jane bought an audio system and agreed to pay for the purchase by making four equal annual…

A: The total cash payments of $4,200 are the sum of the total amount of installment paid in 4 years,…

Q: Jane bought an audio system and agreed to pay for the purchase by making five equal…

A: The cost of the audio system is the present value of the cash payments. The present value of the…

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%…

Q: In 6 years, Mrs. Fong must pay off a note with a face value of $14,000, and interest of 10% per…

A: Solution: 9   Face value of notes $14,000 Interest rate semiannually (10% / 2) 5% Period (6…

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.