You want to borrow $94,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $1,900, but no more. Assuming monthly compounding, what is the highest rate you can afford on a 60-month APR loan?

Q: Suppose you take out a 36-month installment loan to finance a delivery van for $26,100. The payments…

A: Loan pay-off: It means paying the remaining loan balance in just one payment.

Q: t to buy a car worth ₱808,000 at Hyundai Branch through EastWest Bank’s 5-year car loan program.…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: You've just bought a new​ flat-screen TV for ​$2,800 and the store you bought it from offers to let…

A: Price of TV (PV) = $ 2,800 Annual interest rate = 15% Monthly interest rate (r) = 15%/12 = 1.25%…

Q: You borrow $10,000 from a bank for three years at an annual interest rate, or annual percentage rate…

A: The rate that is charged at an annual basis on the borrowing funds as well as earned annually on…

Q: You want to buy a car, and a local bank will lend you $20,000. The loan would be fully amortized…

A: Given Information in the Question:- Loan Amount is $20,000 Loan Period is 5 Years or 60 months…

Q: You want to buy a new sports coupe for $74400 and the finance office at the dealership has quoted…

A: given, p=$74400 r=6.8% m=12 n=4 years (4812)

Q: You want to borrow $64,000 from your local bank to buy a new sailboat. You can afford to make…

A: The amount to be borrowed is $64,000 The monthly payment that can be afforded is $1,100 The time…

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: You want to borrow $44,965 from your local bank to buy a new sailboat. You can afford to make…

A: Solution Given Amount to be borrowed $44965 Monthly payments $1140 Number of period…

Q: Bernie is looking to buy a riding lawn mower for $1320. The store offers a 3-year add-on loan using…

A: Add on loan is a type of loan where the interest is added in the principal amount and divided by…

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: 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: Assume you graduate from college with ​$32,000 in student loans. If your interest rate is fixed at…

A: given, P = $32000 r=4.9% m =12 (monthly compounding) n = 10 year

Q: Suppose that you borrow $10,000 from a bank to purchase a car. You agree with the bank to repay the…

A: Given: Particulars Amount Loan $10,000 Interest rate 16% Years 1

Q: You want to borrow $65,000 from your local bank to buy a new sailboat. You can afford to make…

A: APR or Annual Percentage Rate implies for interest rate applicable on borrowed amount for each year…

Q: You want to borrow $68,000 from your local bank to buy a new sailboat. You can afford to make…

A:

Q: A student graduates from college with $31,000 in student loans with a 5.6% annual simple interest…

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

Q: a. A consumer loan worth ₱75,000 is to be repaid in two years at 6% compounded monthly. What is the…

A: a) Loan (L) = P 75000 n = 2 years = 24 months r = 6% per annum = 0.5% per month Let A = Monthly…

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: You need a 30-year, fixed-rate mortgage to buy a new home for $240,000. Your mortgage bank will lend…

A: Given, New home $240,000 Money at an APR of 3.25 percent for 360 month loan Balloon monthly payments…

Q: What is the monthly loan payment?

A: A personal loan is an unsecured loan and can be easily received without a need to pledge collateral…

Q: You have an outstanding student loan with required payments of $825 per month for the 42 months. The…

A: Monthly payment refers to the equal payments that are required to be paid by the borrower to the…

Q: You want to save the down payment required to purchase a vacation home at the end of four years. If…

A: FUTURE VALUE OF ANNUITY  (FVA) FORMULA: FVA=A×1+rn-1r where, r=rate of interest n = number of years…

Q: You are buying vehicle for $20,000 and are paying $2,000 as a down payment. You have negotiated a…

A: Annuity means finite no. of payments which are same in size and made in equal intervals. This…

Q: You take out a $7,000 car loan that calls for 60 monthly payments starting after 1 month at an APR…

A: The present value of annuity refers to the current value of regular payments made at fixed intervals…

Q: A person needs $20,000 immediately as a down payment on a new home. Suppose that she can borrow this…

A: Loan amount (PV) = $ 20,000 Annual interest rate = 10% Number of compounding per year = 6 Effective…

Q: You have an outstanding student loan with required payments of $500 per month for the next four…

A: Here, Lottery Amount is $10,000

Q: You buy a new truck for your trailer that costs $55,000. What are your monthly payments for a 5 year…

A: Equated monthly installments are equal installments that involve both principal and interest…

Q: If you borrow $30,000 from your dad for college and you agree to pay him back at 14% interest per…

A: GIVEN, LOAN (P)= $30,000 RATE(R) =14% MONTHLY INSTALLMENT(A)= $750 FREQUENCY OF COMPOUNDING (M) =12

Q: You want to borrow $115,000 from your local bank to buy a new sailboat. You can afford to make…

A: Annual Percentage Rate is the annual rate of interest charged from borrowers for the payment to…

Q: You need a 30-year, fixed-rate mortgage to buy a new home for $400,000. Your mortgage bank will lend…

A:

Q: You are planning to build a vacation home.  Your rich uncle offers you a $35,000 loan at 10.5%…

A: The number of years that will take to pay off the loan at given interest rate can be calculated by…

Q: Suppose you borrow $10,000 from your parents to buy a car. You agree to pay $208 per month for 48…

A: Here the monthly payment is a annuity and we need to find the interest rate given the following:…

Q: If you buy a computer directly from the manufacturer for $2,241 and agree to repay it in 48equal…

A: Using Excel PMT function.

Q: Suppose that you decide to purchase a new car. You go to a credit union to get preapproval for your…

A: According to the time value of money concept, the value of the amount of money in the future is less…

Q: If you borrow $30,000 from your dad for college and you agree to pay him back at 14% interest per…

A: Given, Amount borrowed = $30,000 Interest rate = 14% Monthly installment = $750 Monthly interest =…

Q: You are interested in a car which costs $25,000. You have a $2000 down payment, and you have a found…

A: A loan is amortized by paying equal monthly installments comprising Principal and interest. Total…

Q: You borrowed $600,000 from a bank at an interest rate of 70% compounded quarterly to purchase a new…

A: A loan is an amount borrowed by one person from another person at a pre-determined interest rate.…

Q: You have accepted a loan in an amount of $15,000 for your new car. You have agreed to pay the loan…

A: Here, Loan Amount is $15,000 Time Period is 4 years Interest Rate is : 9% 6% 7% 8% Compounding…

Q: You have a down payment of $10,000 saved up to purchase a new vehicle. If you are also approved for…

A: Down payment for a purchase is the immediate cash amount paid by the buyer. A series of payments of…

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.