Answered: You borrow $18826 to buy a car. You…

You borrow $18826 to buy a car. You will have to repay this loan by making equal monthly payments for 5 years. The bank quoted an APR of 12%. How much is your monthly payment (in $ dollars)? $_______

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

See similar textbooks

Related questions

Q: Suppose that Charles and Nancy are saving to buy a house. They have $20,000 in the bank, but know…

A: The concept of the time value of money states that the same amount of money has more value today…

Q: iii) Supera Ltd has a set hurdle rate of 7.5% for projects. Assess whether or not it should accept…

A: Internal Rate of Return: It is the rate at which the net present value of an investment or project…

Q: Steve wants to have $5,000, after 3 years, in a savings account that pays 4% interest compounded…

A: Present value of annuity is the current value of the future payments that are calculated using the…

Q: The face value of a bond is ₱100, 000, 4-year maturity period, and 3.2% coupon. How much interest…

A: Face value = P100,000 Years to maturity = 4 Years Coupon rate = 3.2%

Q: A bond has a face value of ₱100, 000, 4-year maturity period, and 3.2% coupon. What is the total…

A: Face value = P100,000 Years to maturity = 4 Years Coupon rate = 3.2%

Q: 6. Construct an amortization schedule for a loan of RM5,000 to be amortized annually for 4 years at…

A: Loan (mortgage) amortization schedule refers to a schedule which is prepared to shows the periodic…

Q: I Current ratio li. Times interest earned jli. Inventory turnover

A: Current Ratio: It is a measure of a firm's liquidity and shows the firm's ability to repay its…

Q: In 2000, an investment was opened with an initial deposit of $1800. The investment had grown to…

A: Future value of present amount With present value (P), annual compounded interest rate (i) and…

Q: Set XYZ as the last three digits of your student number. Construct an amortization schedule for a…

A: Amortization Schedule: It is a table containing periodic loan payments, interest paid, principal…

Q: GSM Inc. STOCK RETURN YEAR PRICE Jan-2021 P57.70 Feb-2021 P52.90 Mar-2021 P50.95 Apr-2021 P58.25…

A: Here, Total Return =? Average Return =? Standard Deviation =?

Q: Why did bank failures increase, with a lag, after deposit insurance became available to banks? What…

A: Risk-based deposit insurance has premiums that reflect how sensibly banks invest their customers'…

Q: Calculate the accounting rate of return (ARR) for both server investments. Server A __________…

A: Net present value (NPV) of an alternative/project refers to the variance between the initial…

Q: rate" is characterized by being The "discount administered by the Federal Reserve System and not…

A: The discount rate is the rate that the Fed charges to commercial banks and other financial…

Q: Depreciation expense is used to

A: Depreciation is gradual decrease in the value of asset due to normal wear and tear, obsolescence and…

Q: at what price should the bonds sell

A: Bond is a type corporate loan issued by companies to finance their operations. The current price of…

Q: Suppose that consumers have utility function U(C) = log(C) where C is the consumption level and log…

A: The utility of an organization or the aggregate economy over a future period of time, under unknown…

Q: Explain how risk-return trade-off works in relation to residential and commercial property…

A: The rate of return is the change in the price of an asset, investment, or project over time and can…

Q: PROBLEM 1: Three mutually exclusive project design alternatives are being considered. The estimated…

A: NPV is the difference between Present Value of cash Inflows and Initial Investment. A project with…

Q: After learning the course, you divide your portfolio into three equal parts (i.e., equal market…

A: Here, Beta of Market Index is always 1 Beta of Treasury Bills is always 0 Beta of Mutual Fund is 0.8…

Q: Debt payments of $1,650 and $2,400 are due in five months and nine months, respectively. What single…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: a) Kwik supermart has ordered the following supplies over the last year from various suppliers:…

A: Solution:- Average price charged by the new supplier will be the 11% less than the average of the…

Q: Rudolf Company had the following items in its “Cash and cash equivalents” account as of December 31,…

A: Cash and Cash Equivalent majorly includes 1) Cash in Hand 2) Cash at Bank 3) Short Term investment (…

Q: (Ignore income taxes in this problem.) The management of an amusement park is considering purchasing…

A: To assess the annual revenue, NPV should be zero @ 12%.

Q: 16) Amanda Corp's 10-year Bonds yield 7.50%; and 10-year Treasury Bonds real risk-free rate is…

A: Yield on bond have many components risk free rate, inflation premium, liquidity premium and default…

Q: Hi!, i have received a problem from my instructor that really confuses me and Im not really sure…

A: The following information has been provided in the question: Default risk premium=2 percent…

Q: Mia received a gift of $8,200 at the time of her high school graduation. She invests it in an…

A: Future Value = Present Value * ( 1 + Interest rate)time period Solved using Financial Calculator…

Q: Income Statement: A small food stall owned by Ms. Lopez is located at San Fernando Pampanga. She…

A: It is given that: Sales in 2018- 285000 – increase by 10% Cost of goods sold – 10% of projected…

Q: i) Based on the information provided above, apply Gordon’s growth model to compute the dividend…

A: Gordon Growth Model: This model helps in valuing the share of a company by discounting all the…

Q: What is the difference between between beta and standard deviatio

A: In the world of finance in general and investing in particular we often use the concepts of beta as…

Q: Bernard co. has 10% coupon bonds on the market that have 20 years left to maturity. The bonds will…

A: Any investor will always be willing to pay the present value of all future payments discounted at…

Q: Joey Espinoza has $1,000 in cash, he deposits the total amount in Legion Banc. Legion Banc lends the…

A: The banks have to deposit certain amount of money with central bank depending on the deposit made in…

Q: Total amount of depreciation of an asset cannot exceed its: None of these O Scrap value O…

A: As per Bartleby guidelines, If multiple questions are posted, only the first 1 question will be…

Q: Lace Company provided the following information during the current year: 500,000 Dividend received…

A: A cash flow statement is a part of a financial statement. It helps to reconcile the opening cash…

Q: The total assets of a mutual fund amount to ₱40M and the total liabilities of ₱8M. If you invest ₱1M…

A: Stocks are stocks of corporate capital. In some companies, stocks exist as financial assets that can…

Q: Provide an evaluation of the two proposed projects whose cash flow forecasts are found below:…

A: Capital Budgeting is the process of assessing long-term decisions made by management in order to…

Q: Suppose we have the following table of yields on government benchmark bonds. Maturity 2-year 5-year…

A: In this question, the table for the Government bond Yield is given: Government Bond Yield…

Q: Given that Operating Cash Flow is $300 Net Capital Spending $125 Change in Net Working Capital $ 75

A: Cash flow from assets can be get after deduction of capital expenditure and change in working…

Q: Which of the following is not correct about sole proprietorship?

A: There are different form of doing business doing alone ,doing with partners or doing with large…

Q: Could you help me with calculation of cost of debt which is 8,13%, i can see that was made excel…

A: Cost of Debt: It represents the cost of raising debt capital for the issuer. The issuer pays the…

Q: o buy equipment ; current price of it is ( $ 50,000 ) . So , he requested the help of a bank , the…

A: A bank costs a borrower an interest rate that is a percent of the principle, or the amount…

Q: -260000 120000 140000 -350000 100000 130000 200000 50000 3 100000 4 50000 The firm has an…

A: Net present value is the present value of cash flow to the initial investment and if it is positive…

Q: An engineering graduate received a job offer with a promise of a 4.75 percent annual raise in her…

A: This is the case of growing annuity in which periodic amounts are deposited at the end of each year.…

Q: A Php 100,000,10% bond pays dividend every quarter for 8 years. The bond price at par and is…

A: Bonds: Bonds are the liabilities of the company which is issued to raise the funds required to…

Q: 7. In a project, the initial outlay is R$30,00,000; useful life of the project is 10 years; net cash…

A: NPV is the difference between Present Value of cash Inflows and Initial Investment. A project with…

Q: Since only one sign change occurs in the net cash flow series, the project is a simple investment,…

A: Initial Investment = 2,500,000 Periodic Payment = 7,725,000 Lumpsum Payment at 15 Years = 80,000…

Q: Ritter Sports Industries has preferred stock outstanding with a par value of $100. The stock pays a…

A: To calculate the effective rate of return we will use below formula Effective rate of return =…

Q: 2.You are considering an investment costing $300,000. If you want to recover the initial investment,…

A: Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a sum…

Q: Nikita Berhad is evaluating a project which expected to earn a series of cash inflows as shown in…

A: NPV technique assesses the project by analyzing the discounted value of all future cash flows. If…

Q: 31) Today, Dexter is investing $24,000 at 5.5 percent, compounded annually, for 6 years. How much…

A: Compounding technique is an important concept of Time Value of Money, where, the interest earned on…

Q: An investor is considering investing in the following two shares: Beta Fortress plc. 1.4 Castle plc…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Question

You borrow $18826 to buy a car. You will have to repay this loan by making equal monthly payments for 5 years. The bank quoted an APR of 12%. How much is your monthly payment (in $ dollars)? $_______

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Given Information:

VIEW

Calculations are as follow:-

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
Cost of Bank Loan Mary Jones recently obtained an equipment loan from a local bank. The loan is for 15,000 with a nominal interest rate of 11%. However, this is an installment loan, so the bank also charges add-on interest. Mary must make monthly payments on the loan, and the loan is to be repaid in 1 year. What is the effective annual rate on the loan (assuming a 365-day year)?
Calculating interest earned and future value of savings account. If you put 6,000 in a savings account that pays interest at the rate of 3 percent, compounded annually, how much will you have in five years? (Hint: Use the future value formula.) How much interest will you earn during the five years? If you put 6,000 each year into a savings account that pays interest at the rate of 4 percent a year, how much would you have after five years?
Calculating and comparing add-on and simple interest loans. Eli Nelson is borrowing 10,000 for five years at 7 percent. Payments, which are made on a monthly basis, are determined using the add-on method. a. How much total interest will Eli pay on the loan if it is held for the full five-year term? b. What are Elis monthly payments? c. How much higher are the monthly payments under the add-on method than under the simple interest method?