You decide to buy a new iPhone with your credit card. The iPhone you want costs $1450, and your credit card charges 12.99% interest, compounded monthly. If you pay $50 per month on your credit card, how many months will it take you to pay off the card?  How many years is that (round to the nearest tenth)?  I just need the year not the month

Q: You decide to buy a car for $15,000.00 and decide to make payments of $1,100 each month. If the loan…

A: Using excel NPER function

Q: You need to have 59,173 dollars to buy a new car 5 years from now. How much do you need to save at…

A: An annuity is the sum total of all the periodic payments or investments made over the period of time…

Q: You have $2,000 on a credit card that charges a 21% interest rate. If you want to pay off the credit…

A: Monthly payment is a fixed periodic payment which is made by a borrower to the lender.

Q: You want to buy a $260,000 home. You plan to pay $26000 as a down payment, and take out a 30 year…

A: When a person does not have enough money to buy any assets, he would consider taking a loan. The…

Q: You want to purchase a new car in 4 years and expect the car to cost $40,000. Your bank offers a…

A: Solution:- When an equal amount is paid each period at the end of period, it is called ordinary…

Q: How much will you need to save per month to have $200,000 after 12 years, if your account earns 5%…

A: The formula used as follows: Future value of annuity=Payment×1+rn-1r

Q: You want to buy a $23,000 car. You can make a 10% down payment, and will finance the balance with a…

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

Q: the amount you need to save each month

A: given   fv=25000 n= 5*12=60 interest i = 3.5% PMT =?

Q: You want to buy a $31,000 car. The company is offering a 3% interest rate for 48 months (4 years).…

A: Monthly payment formula: monthly payment =principal×rm1-1+rm-m×n where, r = rate of interest m =…

Q: Joel is considering putting a $4300 laptop purchase on his credit card, which has an interest rate…

A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

Q: Joel is considering putting a $2200 laptop purchase on his credit card, which has an interest rate…

A: Monthly payment includes interest payment and portion of principal payment to be paid back. Interest…

Q: You are about to purchase a new car and have two options to pay for it. You can pay $20,000 in cash…

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

Q: You want to buy a car, and a local bank will lend you $35,000. The loan will be fully amortized over…

A: An effective annual rate (EAR) is the actual rate of interest to be paid annually after taking…

Q: Suppose you are currently spending $42.20 per month on streaming entertainment services such as…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: If Say you want to buy your dream car, costing $40k, in 5 years. You are saving up for that by…

A: Car Cost = Future Value Required = 40,000 N = 60 months Monthly Interest Rate = 0.25% Monthly…

Q: You need a home loan of $95,000 after your down payment. How much will your monthly house payment be…

A: Loan amount (PV) = $95000 Interest rate = 6.25% Monthly interest rate (r) = 6.25%/12 =…

Q: How much should you deposit each month in order to save $20,000 in five years? The account you will…

A: Details: RATE (5.75%/12) 0.479167% PERIOD  (12*5) 60 PRESENT VALUE $0 FUTURE VALUE $20,000

Q: You have $4,000 on a credit card that charges a 14% interest rate. If you want to pay off the credit…

A: Using excel PMT function

Q: You want to borrow $75,000 from your local bank to buy a new sailboat. You can afford to make…

A: The given problem can be solved using RATE function in excel. RATE function provides interest rate…

Q: You need to borrow $80,000 to purchase a car. You qualify for a 7-year car loan that requires you to…

A: Borrowing = 80,000 Time Period = 7 years or 84 months Monthly Compounding Interest Rate = 2.28%/12 =…

Q: Joel is considering putting a $2400 laptop purchase on his credit card, which has an interest rate…

A: When something is purchased on credit, the amount can either be paid as a lump sum or in…

Q: You have saved $3,000 for a down payment on a new car. The largest monthly payment you can afford is…

A: Given data; down payment amount = $3000 monthly payment = $400 Annual interest rate = 12% number of…

Q: You just received your first credit card and decided to purchase a new Apple iPad. Youcharged the…

A:

Q: You want to buy a $258,000 home. You plan to pay 20% as a down payment, and take out a 4% APR loan…

A: Amortized Loan:  Amortized loan is a type of loan in which the borrower would pay periodic payments…

Q: You want to buy a $26,000 car. The company is offering a 2% interest rate for 36 months (3 years).…

A: Monthly payments are the periodic amounts that a loan borrower has to make on a regular basis in…

Q: You want to purchase a new car in 3 years and expect the car to cost $15,000. Your bank offers a…

A: Future value of a present value is the value of that amount after taking into account the time value…

Q: You want to buy a car, and a local bank will lend you $15,000. The loan will be fully amortized over…

A: Time value of money (TVM) refers to the concept which proves that the value of money today is higher…

Q: Suppose you want to have $300,000.00 for retirement in 35 years. You plan to make regular monthly…

A: Future value is the value of the cash flows at the end of certain period. Future value of annuity is…

Q: You want to buy a car. The loan amount will be $21,000. The company is offering a 5% interest rate…

A: Loan amount (PV) = $ 21000 Annual interest rate = 5% Monthly interest rate (r) = 5%/12 =…

Q: You want to buy a car and therefore you need $10,000. You can borrow from a bank today for 6 years.…

A: Purchase Price of Car = 10,000 Time Period (N) = 6 years i.e. 72 months Down Payment = 10% Loan =…

Q: You are making car payments of $315/month for the next 3 years, you know that your car loan has an…

A: Given details are : Monthly payment = $315 Time period = 3 Years Interest rate = 12.4% discounted…

Q: If you pay the minimum payment per month of $49.25 on your credit card, you will pay it off after…

A: Short Term finances refers to to financing of funds for very short period of time which ranges from…

Q: You want to buy a $15,000.00 car. You can make a 10% down payment, and will finance the balance with…

A: The Equal Montly installment is calculated with the help of following formula  EMI = P × r(1 + r)n…

Q: You have $4,000 on a credit card that charges a 18% interest rate. If you want to pay off the credit…

A: The question gives the following information:

Q: Joel is considering putting a $4300 laptop purchase on his credit card, which has an interest rate…

A: Value of loan increase at mentioned rate for a loan duration. This FV can be computed by using…

Q: You are looking to purchase a Tesla Model X sport utility vehicle. The price of the vehicle is…

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

Q: You decide to buy a car for $16,000.00 and decide to make payments of $700 each month. If the loan…

A: The present value of the annuity is the current worth of a cash flow series at a certain rate of…

Q: You want to buy a $15,000 car. The company is offering a 5% interest rate for 60 months (5 years).…

A: Monthly payment is defined as the payment that an individual to lender for each month for the…

Q: Suppose you want to have $600,000 for retirement in 25 years. Your account earns 10% interest. How…

A: Future Value   $  6,00,000.00 Time Period 25 Interest Rate 10%

Q: You have just taken out a $25.000 car loan with a 4% APR, compounded monthly. The loan is for five…

A: A monthly mortgage payment is a monthly payment that is to be paid for a specific period of time to…

Q: How much will you need to save per month to have $200,000 after 12 years, if you account earns 5%…

A: Compound interest = P"(1+r%/n)^tn Since the final amount is given , we need to calculate the…

Q: A student wants to save up for a car, assuming that he/she would be able to save up a certain sum…

A: Given information, Time Period = 4 years*12 =48 periods (when period is monthly) Future Value of…

Q: You have saved $4,000 for a down payment on a new car. Thelargest monthly payment you can afford is…

A: Given information: Down payment $4,000 Monthly payment of $350 APR is 12% Number of months 48 and 60

Q: You want to buy a $210,000 home. You plan to pay $10500 as a down payment, and take out a 30 year…

A: To find the loan amount one has to deduct the down payment from the total loan amount.

Q: You want to borrow$60000from your local bank to buy a sailboat. You can afford to make monthly…

A: For determining the APR, the monthly rate will be computed using RATE function available in…

Q: You have $2,000 on a credit card that charges a 17% interest rate. If you want to pay off the credit…

A: Credit card amount due (PV) = $2000 Annual interest rate = 17% Monthly interest rate = 17%/12 =…

Q: You are considering moving your money to a new bank offering a one-year CD that pays an 8% APR with…

A: Annual Percentage Rate = 8% Monthly Compounding Number of compounding periods = 12

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.