Jerry signs a $16,000 loan for the purchase of a new car. The terms is for 48 months, at an interest rate of 4.8%. What is Jerry’s monthly payment? You must show the formulas with the values filled in.

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: Jim Hopper plans to place his money in a certificate of deposit that matures in three months. The…

A: A certificate of deposit is a fixed income instrument issued by banks and credit unions. Interest…

Q: While buying a new car, David made a down payment of $800 and agreed to month-end payments of $280…

A: The loans are paid by the equal monthly installments that carry the payment for interest and payment…

Q: Daniel deposits $20,000 into an account earning interest at 6% per year compounded quarterly. He…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

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: Jesse received a loan of $26,000 from the bank at 5.50% compounded monthly. If he had to repay $300…

A: First we need to find the total tenure of loan. Loan amount = PV of instalments PV = E(1-(1+r)-p)/r…

Q: Polly purchased a car. She paid ₱150,000.00 as down payment, and ₱5,500.00 payable at the beginning…

A: The present value of money is the discounted value of future cash flows. The change in the present…

Q: Justin is financing S169,600 for a home at 5.25% interest with a 25-year fixed-rate loan. Find the…

A: Using excel pmt function

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: Jim made a down payment of 2500 dollars toward the purchase of a car. To pay the balance of the…

A: Given information: Down payment is $2,500 Nominal interest rate is 4% compounded monthly Payment of…

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: Lupe made a down payment of $2000 toward the purchase of a new car. To pay the balance of the…

A: Loan borrowed: loan is $5,258.53

Q: Polly purchased a car. She paid ₱150,000.00 as down payment, and ₱5,500.00 payable at the beginning…

A: a) Periodic Rate = Annual Rate / 12

Q: Carter bought a new car and financed $⁢25,000 to make the purchase. He financed the car for 60…

A: Loan amount (PV) = $ 25000 Interest rate = 5.5% Monthly interest rate (r) =…

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: Mr. Smith has borrowed $20,000 from the bank to start his small book-keeping business. He has…

A: Using excel RATE function

Q: Sam Robinson borrowed $10,000 from a friend and promised to pay the loan in 10 equal annual…

A:

Q: Taylor will make payments of $150 at the end of every month to settle a loan of $1,300 at 5.10%…

A: Montly payment(PMT) = $150 Loan Amount = $1,300 Rate = 5.10% Compounded semi- annually

Q: Jacqueline received a $30,950 loan from a bank that was charging interest at 4.50% compounded…

A: The periodic payment is based on the loan amount, the periodic interest rate, and the number of…

Q: kenzo decided to buy a brand new car worth php 1, 200, 000 and plan to amortize the loan in monthly…

A: Present Value of Ordinary Annuity refers to the concept which gives out the discounted or today's…

Q: Homer promises to pay $1,000 at the end of 6 months in obtaining a loan from a banker who charges 6%…

A: Loan amount (PV) is $1,000 Loan Period is 6 months Interest Rate charged in advance is 6%  (We…

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: Mr. Park plans to loan 500,000 from a bank to replace his old equipment. The bank approved him the…

A: Here, Loan Amount is 500,000 Interest Rate (r) is 15% Compounding Period (m) is Monthly i.e 12 Time…

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: 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: 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: Your grandmother set up an annuity, in which she will receive a monthly payment from the bank of…

A: The present value of an annuity is the present value of a series of cash flows at a certain rate of…

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: Liz borrowed $52,500 to purchase a home. The bank offered her an APR of 3.49% for a term length of…

A: Borrowings are the liability that is used to finance the requirement of the funds. The borrower…

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: An Engineer bought a house and lot for which he paid a 10% down-payment, worth 200,000 Pesos; and…

A: Given, The down payment is 200,000 pesos, which is 10% of cost of house. Interest rate is 15%…

Q: Johnny has a loan for $50,000 at a rate of i(4) = 8% on which he makes quarterly payments of $2,000.…

A: Amount of deposit every 3 months: $500 starting from today at a rate of interest of 1% effectively.…

Q: Approximately how long will he take to pay off the loan under these​ conditions?

A: Information Provided: Time = 5 years Interest rate = 6.5% Present value = $62,000 Additional payment…

Q: Jenna bought a new car for $⁢39,000. She paid a 10% down payment and financed the remaining balance…

A: Monthly mortgage payment: The monthly mortgage payment is the repayment of a mortgage loan by paying…

Q: Tom takes out a loan for $15,000 at an APR of 6% to start out his business. He promises to make…

A: GIVEN, P=$15,000 R=6% M=4 N =10 YEARS

Q: Mrs. Dollie availed a cash loan that gave her an option to pay Php10,000 monthly for one year. The…

A: An annuity is a stream of cash flows wherein an equal payment is paid at the end of every period.

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: 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: he annual interest rate on the loan is

A: Interest Rate: It is the rate used to compute the finance charge paid by the borrower for taking a…

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: Craig is saving for a $3500 sound system. He plans to deposit $175 at the end of every 3 months into…

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

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: Emma bought a $360,000.00 house, paying 10% down, and financing the rest at 2% interest for 20…

A: Price of house = $ 360,000 Dow payment =10% Loan amount (PV) = 360,000*(1-0.10)…

Q: Moon purchases a lot for $300,000. Moon agrees to pay $25,000 dollars at the end of each year. If…

A: Time has been precious in all perspectives, however in terms of finance, time has a monetary value.…

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: To rent an apartment, Nick has to pay the first month of rent plus the last month of rent and a…

A: Under the cash advancement on the credit card system, the borrower is able to borrow money and has…

Q: Mike has a credit card balance of $30,000. The annual interest rate is 17%. He is required to pay a…

A: Credit Balance  $  30,000.00 Annual Interest Rate  17% Minimum Payment 4% or  $        50.00…

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.