Sylvie Cardinal bought a business for $45 000. She made a down payment of $10 000 and agreed to pay the balance by equal payments at the end of every three months for eight years. Interest is 8% mpounded quarterly. a. What is the size of the quarterly payments? b. What will be the total cost of financing? c. How much will Sylvie owe after five years?

Q: A small business owner contributes $4,000 at the end of each quarter to a retirement account that…

A: FV is the future worth of cash flows that have occurred in the past or present.

Q: Bryan received a loan of $42,000 from the bank at 3.25% compounded monthly. If she had to repay $350…

A: Given that: Interest rate r = 3.25% per year = 0.2708% per month Period n =3 year= 36 months…

Q: A woman went to the Beneficial Loan Company and borrowed $10,000. She must pay $323.53 at the end of…

A: Given information: Borrowed amount is $10,000 Monthly payment is $323.53 Number of periods is 60…

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

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

Q: Andrew Bolkonsky borrows $200,000 to purchase a house for investment purposes on January 1st 2006.…

A: The concept of present value states that a sum of money is worth today more than the same sum of…

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: A purchased a small condominium. He paid P350,000 as a down payment and agreed to pay P35,000 every…

A: Down payment = P350,000 Quarterly payment = P35000 Interest rate = 12% Quarterly interest rate =…

Q: A couple who borrow $60,000 for 25 years at 6%, compounded monthly, must make monthly payments of…

A: Calculate the interest amount for first year as follows: Interest = Amount * Interest rate Interest…

Q: n order to accumulate enough money for a down payment on a house, a couple deposits $769 per month…

A: using excel PV and FV function   =PV(rate,nper,pmt,[fv])  =FV(rate,nper,pmt,[pv]) Where, rate = rate…

Q: Prisha received a loan of $25,000 from the bank at 3.50% compounded monthly. If she had to repay…

A: Solution:- When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: Holly received a 15 year loan of $340,000 to purchase a truck. The interest rate on the loan was…

A: A loan is a sort of debt that is taken on by an individual or another institution. The lender, which…

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: Hange Zoe borrowed money to upgrade their battle equipment of Survey Corps in the lending company in…

A: First obligation (L1) = P 225000 after 1 year r1 = 10% Second obligation (L2) = P 320000 after 2…

Q: Kim Baker invested $250 at the end of every 3-month period, for 5 years, at 8% interest compounded…

A: If money has been deposited in an account at the beginning of every period for a specified duration…

Q: Jerry bought a house for $400,000 and made an $80,000 down payment. He obtained a 30-year loan for…

A: Given information: House bought for $400,000 Down payment made $80,000 Interest rate is 6% Term of…

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: Joseph received a loan of $40,000 from the bank at 4.25% compounded monthly. If she had to repay…

A: Mortgage/ Borrowings:  Borrowings are the loans taken by an individual, from banks or non-banking…

Q: Belle decided to start a new investment account.  She deposits $1,000 into an account that earns…

A: Using excel FV function

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: Panpan purchased a car. She paid 250,000 as down payment, and 5,500 payable at the beginning of each…

A: Equivalent cash price refers to the equivalent present cost of the car at the time of purchase. It…

Q: Acme Steamer purchased a new pump for $75,000.  They borrowed the money for the pump from the bank…

A: Using Excel PMT function to calculate monthly payment

Q: f Brian wants to buy a house that cost $100000 the bank agreed to give him 80% of cost at 0.07…

A: Installment is the amount of periodic payments a borrower has to make to its lender in order to pay…

Q: Polly purchased a car. She paid P150,000 as down payment and pays P5,500 at the end of each month…

A: Polly purchased a car and paid ₱ 1,50,000 as the down payment and thereafter pays ₱ 5500 at the end…

Q: Steve invests $1,800 in an account that earns 3.7% annual interest, compounded continuously. What is…

A: Present Value = $1,800 Interest rate = 3.7% Time Period = 10 Years

Q: An engineering graduate starts a new job at $68,000 per year. Her investments are deposited at the…

A: future value of annuity formula: fva=pmt×1+rn-1r

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: A young executive deposits $400 at the end of each month for 4 years into an account that earns 6%…

A: Formulas:

Q: A young executive is going to purchase a vacation property for investment purposes. She needs to…

A: Introduction: Compound interest is the interest generated on the initial principle plus the interest…

Q: In order to accumulate enough money for a down payment on a house, a couple deposits $623 per month…

A: FUTURE VALUE OF ANNUITY IS THE GROUP OF RECUURING CASHFLOW COMPOUNDED TO FUTURE DATE. GIVE, A= $623…

Q: A woman went to the Beneficial Loan Company and borrowed $10,000. She must pay $323.53 at the end of…

A: EAR or Effective annual rate is  yearly rate computed after taking into account all the compounding…

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: Mariah applied for a loan in a bank that gave 10, 000 pesos monthly payment for 2 years. The first…

A: The present value of an annuity is the current value of the future payments that are calculated…

Q: A young engineer borrowed P 10,000 at 12% interest and paid P 2,000 per annum for the last 4 years.…

A: Loan amount = P 10000 Interest rate = 12% Annual payment = P 2000 Number of annual payments = 4

Q: Stacey purchased a car for $58,300; she paid 5% of the cost as a down payment and finance he balance…

A: The loans are paid equal end of the period payments and these periodic payments carry the payment…

Q: Mary Smith took a car loan of $20,000 to make 60 equal monthly payments. The interest compounds…

A: Annual worth distributes present worth into equivalent uniform value over its useful life.

Q: how much will she have in her account after 11 years

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: In order to accumulate enough money for a down payment on a house, a couple deposits $551 per month…

A: Given, Amount of deposit is $551 every month Interest rate is 3% compounded monthly Term is 5 years

Q: Lauren purchased a car for $53,000; she paid $13250 as a down payment and financed the balance…

A: The loan amount would be the difference between the car price and the down payment.  Total Interest…

Q: In order to accumulate enough money for a down payment on a house, a couple deposits $273 per month…

A: Compounded monthly- In the actual world, interest is often compounded more than one time a year. In…

Q: a.) What is the monthly rate? b.) How many total deposits?

A: Information Provided: Amount = $750,000 Term = 4 years Interest rate = 15% compounded monthly

Q: Doris purchased a Steinway concert piano for $132,000 with a down payment of 25%, and a loan for the…

A: Cost of piano is $132,000 Down payment is 25% Equal Monthly Payment is $1,650 Interest rate…

Q: Elin purchased a used car for ​$9,500. She wrote a check for $2,000 as a down payment for the car…

A: In this question Elin purchased a car for $ 9500 and pay down payment of $ 2000 & for balance of…

Q: Rebecca Carlson purchases a car for $25,000 and finances her purchase by borrowing the money at 8%…

A: Equated Monthly Installments is one part of the equally divided monthly outgoes to clear off an…

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: Lina borrowed 5000 at 8% compunded monthly.  She must begin to repay it at the end of this month and…

A: Ordinary annuity refers to the series of periodic payments that a borrower has to make regularly to…

Q: A small business owner contributes $3,000 at the end of each quarter to a retirement account that…

A: Given information: Quarterly payment $3,000 Interest rate 10% compounded quarterly Future value is…

Q: A couple who borrow $100,000 for 30 years at 8.4%, compounded monthly, must make monthly payments of…

A: Loan amount is $100,000 Time period is 30 years Interest rate is 8.4% Monthly payment is $761.84

Q: In 5 years a couple would like to have $25,000 for a down payment on a house. What fixed amount…

A: Given: Accumulated amount (A)=$25000compound interest rate (r)=9%No. of times compounded in a year…

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.