Sam took a $5000 loan to build a deck in the backyard. The loan requires payments at the end of each quarter or 4 years. If the interest on the loan is 9% compounded monthly, what is the size of each payment, Sam requires to make

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: George buys a car every 6 years for P18,000. He trades in his current car to count as the 20%…

A: Given information: George: Price of car : 18,000 Down payment : 20% Interest rate : 12% Time period…

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: George secured an adjustable-rate mortgage (ARM) loan to help finance the purchase of his home 5…

A: This question provides that the interest rate goes down to 5.50 per year from 6.0% per and it is…

Q: While buying a new car, Monica made a down payment of $900 and agreed to make month-end payments of…

A: Down payment (D) = $900 Month end payment (m) = $240 Monthly period of repayment (p) = 56 (i.e. 4…

Q: Asa has invested money from the settlement of an insurance claim. She plans to withdraw $1,920 from…

A: Fist we need to calculate present value of all withdrawals by using present value of ordinary…

Q: Starting on the day he retires, Bob wants to receive payments of $10,000 at the beginning of each…

A: Present value of the amount is the worth of that amount in current times that is expected to be…

Q: Elin purchased a used car for $15,000. She wrote a check for $3000 as a down payment for the car and…

A: Equated monthly installment or EMI is referred to as the amount that are paid in monthly basis…

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: John took a personal loan of $100,000 from the bank at a nominal interest rate of 6% per year…

A: Disclaimer: “Since you have asked multiple questions, we will solve the first question for you. If…

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: Roberto and Micah plan to purchase a home for $225,000. They will pay 20% down and finance the…

A: Monthly installment = loan / cumulative PV factor Monthly installment = loan / PVAIF (0.308333%,…

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: Jessica borrowed $3300 from the bank in order to buy a new piano. She will pay it off by equal…

A: To calculate the weekly installment we have to use the proportionate interest rate and period…

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: Tara has just bought a house for $930,000 with a 30% down payment and a 70% mortgage loan for 20…

A: Given: Cost of house = $930,000 Down payment = 30% Interest rate = 2.19% Years = 20

Q: While buying a new car, Thomas made a down payment of $1,000.00 and agreed to make month-end…

A: Present value of annuity is current value of the future annuity flow.

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: Being cautious with money, Cyril has contributed $1,700 at the start of every month into an RRSP,…

A: value of investment in 10 years from now can be calculated using following function in excel. FV…

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: 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: Mary decided to begin saving towards the purchase of a new car in 5 years. If Mary put $500 at the…

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

Q: William got a loan for 25,000 dlls to be payable in 19 years with interest rate of 1.7 percent per…

A: Loan amount = 25000 dlls Period = 19 Years Annual interest rate = 1.7%

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: Sergio purchased a house for $440,000; he paid $44000 as a down payment and financed the balance…

A: NOTE: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts…

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: 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: 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: 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: Sam's family has decided that they will start depositing $100 at the end of every month into a…

A: Monthly Deposit = 100 End of month deposits Time Period =  3 years or 36 months Interest Rate = 4.6%…

Q: Bryce and David plan to purchase a home for $176,000. They will pay 20% down and finance the…

A: Down payment = 20% Loan (L) = 80% of $176000 = $140800 n = 15 years = 180 months r = 8.2% per annum…

Q: Ken is paying off a loan by making a $50 down payment and then $50 payments at the end of every…

A: Loan is the amount borrowed by the company or individual for the purpose of fulfilling the financial…

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: Robert recently borrowed $20,000 to purchase a new car. The car loan is fully amortized over 4…

A: Ordinary annuity are the PMTs which are made at the end of the period.

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: Sarah secured a bank loan of $180,000 for the purchase of a house. The mortgage is to be amortized…

A: We will use this formula for calculation of monthly mortgage payment of loan. Monthly payment of…

Q: Cindy and Rick purchased a home for $145,000 and financed it with a 30-year fixed-rate loan at 6.25%…

A: Introduction Mortgage Loan: A mortgage is a loan that a borrower takes out to buy or retain a house…

Q: Adrian, a single man who wants to buy a house in five years, read an artide that recommended a down…

A: The amount borrowed will be equal to the present value of all the future payment made at the given…

Q: Angelica took out a 20-year loan for $170,000 at 5.4% interest, compounded monthly. What is her…

A: The monthly payment is determined by dividing the loan amount from the present value factor. The…

Q: Cena deposits a certain amount of money into his family’s savings account at the beginning of each…

A: Future value = $ 100,000 Period = 4 Years Period in quarters = 4*4 = 16 Annual interest rate = 8%…

Q: Andrew just bought a new boat for $15,000 to use on the river near his home. He has taken delivery…

A: A balloon loan is a loan which is paid off with a large single, final payment. It involves making…

Q: Sarah secured a bank loan of $200000 for the purchase of a house. The mortgage is to be amortized…

A: Excel Spreadsheet: Excel Workings:

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: Mr smith wants to borrow P100,000 from a bank to rebuild his shop from damages caused by an…

A: First we need to calculate size of quarterly payment of loan amount. PMT =PV*i1-1(1+i)n where PV…

Q: When Florio and Rhoda bought their home, they borrowed $200,000 for 30 years at 6%, compounded…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

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.