To purchase a new car, you borrow $20,000. The bank offers a 6-year loan at an interest rate of 3.25% compounded annually. If you make.only one payment at the end of the loan period, repaying the principal and interest: How much of the total amount repaid represents interest? O 4.231 O 4.321 O4.123 O$4.331

Q: C) A homebuyer approached the bank for a home loan of RO 87,000. The bank has approved the loan…

A: As per company policy it is only possible to solve the first question.

Q: A commercial bank will loan you $20,000 for four years to buy a car. The loan must be repaid in 60…

A: Loan = $20,000 No.of Monthly payments = 60 Annual interest rate = 6%

Q: If you borrow $3,600 to buy a car at 12% per year compounded monthly, to be repaid over the next…

A: Answer Borrowing amount = $3,600 Interest rate = 12% per year  Interest rate monthly = 1%  Time…

Q: You are financing a car worth $29039.30 including tax. The interest rate is 10.8% compounded daily.…

A: Loan amount (L) = $29039.30 - $1700 = $27339.30 Interest rate = 10.8% daily compounding (m = 365) n…

Q: You purchase a used car for $8,000 with a loan at 2.4% monthly payments. Find the Payment and how…

A: A loan refers to the money which is borrowed by a borrower from a lender in order to meet any…

Q: You purchase a basic package, 4-door sedan for your company's fleet for $18,000. The 3 year loan has…

A: Assumption: It is assumed the given situation is in monthly compounding. The question gives the…

Q: A commercial bank will loan you $27,000 for five years to buy a car. The loan must be repaid in 60…

A: EMI or equated monthly installment is referred to as an amount payable, which is paid in each and…

Q: For the car loan described, give the following information. A car dealer will sell you the $30,950…

A: In this problem we have to get interest rate from given data.

Q: Assuming that the dealership offers you 5-year loan at 4.7% compounded monthly, what payments would…

A: The question is based on the concept of Annuity in Financial Management. Annuity refers to the…

Q: Suppose a man can afford monthly car payments of $380 per month, and his bank is offering a…

A: We need to use loan amortization  formula to calculate amount of loan that can be afford Loan…

Q: You are considering the purchase of a new car. You can afford a payment of $400 per month. You plan…

A: In the given problem we are considering to buy a new car and we want to know how much money we can…

Q: In order to buy a car, you borrow $30,000 from a friend at 8%/year compounded monthly for 4 years.…

A: Loan amount (PV) = $ 30,000 Interest rate = 8% Monthly interest rate (r) = 8%/12 =…

Q: You borrow $18826 to buy a car. You will have to repay this loan by making equal monthly payments…

A: Borrowed amount is $18826 Time period is 5 years APR is 12% To Find: Monthly payment

Q: A customer of your bank comes for a car loan 10000 OMR. He is charged with an interest rate of 5%…

A: Fixed monthly payment =P× r ×(1+r)n(1+r)n-1 Where : P = Loan amount r = monthly rate of interest n =…

Q: You decide that you can spend 600 as a monthly payment for a new car. Your bank offers car loans at…

A: The amount that can be borrowed should equal the present value of future payments. This is based on…

Q: You have just purchased a new automobile costing $24000. the trade-in you have is valued at $6000.…

A: After trade in value the cost remains at $24000 -$6000 = $18000. This much needs to be financed. The…

Q: Solve Problem 20.11 using Excel.

A: Loans refer to the amount that is borrowed on credit by the individual or the company from the banks…

Q: You visited your bank and asked about car loan options you can avail for the purchase of a new car…

A: Using excel PMT function to calculate the periodic payment  Calculate the interest paid in all the 4…

Q: You purchase a home and secure a 30 year equal payment loan for $200,000 at a interest rate of 5.25%…

A: The number of months to stay will be around 6 months.

Q: For the car loan described, give the following information. A car dealer will sell you the $30,750…

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…

Q: You decide to borrow $250,000 to build a new home. The bank charges an interest rate of 8%…

A: Monthly payments to be paid on the loan amount are calculated using the interest rate, loan amount…

Q: Kindly answer all the questions and use 360 days in a year in all problems. Thank you. 2. ABC can…

A: “Since you have posted multiple questions, we will solve the first question for you. To get the…

Q: You borrow Php 1,000,000.00 for one year from a friend at an interest rate of 14 per month instead…

A: Borrowing = 1,000,000 Time Period (N) = 1 year   Option 1. Bank Loan at 13% per year   Option 2.…

Q: After making the twenty-sixth payment on your car loan, you wanted to find out how much is left of…

A: Loan amount (PV) = $27000 Interest rate = 7.1% Monthly interest rate (r) = 7.1%/12 =…

Q: You are buying your first car and have taken out a loan to fund the purchase. The terms of the loan…

A: Loan Amount = 20,000 Interest Rate = 5% Time Period = 5 years Annual Repayment with end of year…

Q: If you borrow $3,600 to buy a car at 15% per year compounded monthly, to be repaid over the next…

A: Monthly Payment = P x r / [1 - {1 / (1 + r)^n}] Here, P = Present Value or Loan Amount i.e. $3600 r…

Q: vings account may allow the owner to withdraw ₱30,000 semi-annually for 3 years starting at the end…

A: In this we need to calculate the present value of money.

Q: The purchase price of a car is Php 40,141, Mr. Smith makes a down payment of Php 5,802 and borrows…

A: Answer: Calculation of the value of the required monthly payment to pay off the loan: Formula, we…

Q: You make a down payment of $1,500 to purchase a used car worth $5,500.00 cash price and finance the…

A: Time value concept Receiving the value today is of more value than that of receiving the same amount…

Q: The loan is due at the end of 2 years(balloon loan). It has a balance of $5,000 and an interest rate…

A: Present Value: When a predetermined rate of return is applied to a future amount of money or stream…

Q: The price of a new car is $32,000. Assume that an individual makes a down payment of 25% toward the…

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

Q: Suppose that you borrow $10,000 for four years at 8% toward the purchase of a car. Use PMT to find…

A: given, p = 10000 n = 12 r =8% t= 4 pmt=p×rn1-1+rn-nt=10000×8%121-1+8%12-12×4=$244.14 MONTHLY PAYMENT…

Q: You have just purchased a new automobile costing $24000. the trade-in you have is valued at $6000.…

A: The given problem can be solved using PMT function in excel. PMT computes equal payments for given…

Q: Assume you bought a car using a loan that requires payments of $3,000 to be made at the end of every…

A: Present value of annuity due is calculated to determine the total present worth of the annuity paid…

Q: You borrow $22541 to buy a car. You will have to repay this loan by making equal monthly payments…

A: In order to calculate the monthly payment on the financial calculator, firstly we are required to…

Q: A local car dealer offers a customer a 3-year car loan of $15,000 using “add-on" interest. $15,000…

A: Effective annual interest rate can be defined as that rate which is charged on annual basis after…

Q: After making bwenty-seventh payment of $423.83 on your car loan, you wanted to find out how much is…

A: Principal amount= $25000 monthly payment= $423.83 interest rate= 6.8% Time= 6 years

Q: You purchase a new TV with a store credit card for $800. You have a year to pay off the TV, but…

A: FV=PV×1+Rmm×n where, FV= FUTURE VALUE PV= PRESENT VALUE R=RATE n= no of period m= compounding in a…

Q: You want to buy a car and therefore you borrowed $10,000 from a bank today for 6 years. The nominal…

A: It can be calculated using PMT function in excel. PMT(rate, nper, pv, [fv], [type]) Rate The…

Q: You are ready to buy a new car. You can afford to repay $300 each month for 60 months (paid at the…

A: In this question we require to calculate the amount we can spend on car i.e. present value of the…

Q: To purchase a new car, you borrow $20,000. The bank offers a 6-year loan at an interest rate of…

A: Answer-  Option(C) SPCAF- Single payment compound amount factor. It means payment is done at one go…

Q: (a) You want to buy a car, and a local bank will lend you $40,000. The loan will be fully amortized…

A: Given  Total loan amount is $40,000 The rate is 5%

Q: You have just purchased a car and taken out a $48,000 loan. The loan has a five-year term with…

A: In Installment payment system, loan in not paid collectively with interest due but interest and…

Q: You are planning to take a car, its cash price is Rs.800,000. Bank is offering seven year monthly…

A: GIVEN, loan (P) = $800,000 rate (r) = 18% n= 7 m =12 annuity due

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.