You wish to buy a $10,000 dining room set.  The furniture store offers you a three-year loan with an 11 percent APR.  What are the monthly payments?  How would the payment differ if you paid interest only?  What would the consequences of such a decision be?

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: Sandy is buying a new chair for $36,425, including a shipping charge of $1300. She is considering…

A: Present value of annuity is the stream of cash flows that are required to be invested today in order…

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

A: A loan is an agreement where an amount is forwarded in exchange for periodic payments that cover the…

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

A: The annual interest rate that is charged by the lenders or at which the investors earn additional…

Q: You need to borrow $12,000 to buy a car, so you visit two banks and are given two alternatives. The…

A: Loan is a contract between lender and borrower where lender provide funds to borrower which repaid…

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: you want to buy a car for $8300 with $360 monthly payments for 4 years, what is the annual interest…

A: Interest rate is the rate which the customer would have to pay on the periodic payment of the…

Q: A credit card company offers a deferred payment option for the purchase of any appliance. Rose plans…

A: Monthly payment (M) = 4000 Number of payments (n) = 24 r = 10% per annum = 0.8333% per month Cash…

Q: You work for a furniture store. You normally sell a living room set for OMR 4,000 and finance the…

A: Present Value:   The present value is the value of the sum received at time 0 or the current period.…

Q: A small businessman is about to acquire a machine whose price is $ 15,000 with VAT included. If the…

A: A. Payment in cash Cash payment = $15000(1-15%) = $ 12750   B. Installment to pay on credit Initial…

Q: Today you purchase a previously owned Tesla Model 3 for $40,000. You make a down payment of $5,000…

A: Given The purchase price is $40,000 Down payment $5,000 Rate is 0.25% per month payable in 60…

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 decide to buy a $ 1,500 piece of furniture at a local furniture store. The furniture store asks…

A: Annual rate (r) = 25% Number of compounding per year (m) = 12

Q: You want to buy a new sports coupe for $132,500, and the finance office at the dealership has quoted…

A: The effective annual rate is the effective interest rate applicable on the loan after taking into…

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

A:

Q: You want to buy a car, and a local bank will lend you $30,000. The loan would be fully amortized…

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

Q: Suppose you are getting a loan from a bank to purchase a feed business. The interest rate on the…

A: APR(Annual percentage rate) refers to annual cost paid by the borrower for the loan taken which…

Q: You buy a ten-year-old car for $12,000. You decide to pay $2000 down, and the used car dealer gives…

A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

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: "A furniture store has an ad for a sofa set priced at $1600. The customer is offered the choice of…

A: A loan is an agreement between two parties where one party forwards an amount for it to be paid back…

Q: You want to buy a new sports coupe for $84,500, and the finance office at the dealership has quoted…

A: APR refers to annual percentage rate. An APR is the annual rate that is charged for borrowing or can…

Q: A computer dealer offers (a) to lease a system to you for $50 per month for two years. At the end of…

A: Basic Details: Interest = 12% Number of Months = n =  24 Months Option A: Lease Amount Per Month =…

Q: You want to borrow $94,000 from your local bank to buy a new sailboat. You can afford to make…

A: Loan is an agreement between lender and borrower where lender provide funds to borrower which repaid…

Q: To buy a car, you borrow $28,000 with a term of five years at an APR of 7%. What is your monthly…

A: Loan amount (PV) = $ 28,000 APR = 7% Monthly interest rate (r) = 7%/12 = 0.583333333333333% 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: Loan amount is the amount borrowed from the financial institutions such as banks, corporate houses,…

Q: You want to buy a new sports coupe for $74,900, and the finance office at the dealership has quoted…

A: Loan amount (PV) = $ 74,900 Annual interest rate = 7.3% Monthly interest rate (r) = 7.3%/12 =…

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: 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 is the modified interest rate from the nominal rate that represents the…

Q: An electronics retailer is offering a deferred payment plan. A customer can buy a laptop today for…

A: Monthly payment (P) = $ 145 Number of monthly payments (n) = 12 Rate of return = 12% Monthly…

Q: You decide to purchase a building for $30,000 by paying $5,000 down and assuming a mortgage of…

A: The annual percentage rate (APR): It is the total interest expressed as percentage paid on an loan.

Q: You want to buy a new car, but you can make an initial payment of only $1,300 and can afford monthly…

A: Monthly interest = APR /Number of months Monthly interest =  9%/12 Monthly interest = 0.75%

Q: Suppose you buy an appliance costing ​$2350 at a store charging 13​% ​add-on interest, you make a…

A: Computation of principal amount:

Q: Someone offers to buy your car for four, equal annual payments, beginning 2 years from today. If you…

A: We use PMT function to calculate annual payments

Q: How much is your monthly payment? use monthly compunding formula

A: Answer:

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

A:

Q: To purchase a used automobile, you borrow $10,000 from Loan Shark Enterprises. They tell you the…

A: The APR is the annualized measure of the costs of borrowing, the APR will increase when the cost of…

Q: You want to buy a new sports coupe for $74,700 , and the finance office at the dealership has quoted…

A: The monthly payments is calculated by using fallowing formula       Present value P = Present value…

Q: The furniture store offers you no-money-down on a new set of living room furniture. Further, you may…

A:

Q: You need a home loan of $65,000 after your down payment. How much will your monthly house payment be…

A: FORMULA Monthly payment = LV/[1-(1+R)-N]/R Where LV - Loan amount i.e. $65000 R - Monthly interest…

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: 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: You want to buy a new sports coupe for $87,500, and the finance office at the dealership has quoted…

A: As per the given information: Present value (P) - $87,500 APR - 6.9% Monthly APR (I) - 6.9%/12 =…

Q: A consumer faces the following decision. She can buy a computer for $1050 and pay $10 per month for…

A: To compare the alternatives, total present value of cost of computer will be calculated. Present…

Q: Suppose you want to purchase a house. Your take-home pay is $⁢2830 per month, and you wish to stay…

A: Monthly affordable payment (M) = (1/4) of $2830 = $707.50 r = 3.95% per annum = 0.329167% per month…

Q: You want to buy a new sports coupe for $78,500, and the finance office at the dealership has quoted…

A: Loan amount = $78,500  Annual percentage rate (APR) = 6% Effective annual rate (EAR) is the…

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

Loans

A loan is a term that we are all familiar with. The processing of loans is one of the most important functions of a bank. It keeps our economy stable and facilitates the implementation of monetary policies. Let's take a look at the different forms of loans and get some answers to some common questions.