Financial Planning Exercise 4 Calculating single payment loan amount due at maturity Chase Boyd plans to borrow $8,000 for 6 years. The loan will be repaid with a single payment after six years, and the interest on the loan will be computed using the simple interest method at an annual rate of 10 percent. How much will Chase have to pay in six years? $ How much will he have to pay at maturity if he's required to make annual interest payments at the end of each year? $

Financial Planning Exercise 4 Calculating single payment loan amount due at maturity Chase Boyd plans to borrow $8,000 for 6 years. The loan will be repaid with a single payment after six years, and the interest on the loan will be computed using the simple interest method at an annual rate of 10 percent. How much will Chase have to pay in six years? $ How much will he have to pay at maturity if he's required to make annual interest payments at the end of each year? $

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter7: Using Consumer Loans

Section: Chapter Questions

Problem 4FPE: Calculating single-payment loan amount due at maturity. Stanley Price plans to borrow 8,000 for five...

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Calculating single-payment loan amount due at maturity. Stanley Price plans to borrow 8,000 for five years. The loan will be repaid with a single payment after five years, and the interest on the loan will be computed using the simple interest method at an annual rate of 6 percent. How much will Stanley have to pay in five years? How much will he have to pay at maturity if hes required to make annual interest payments at the end of each year?
QUESTION ONEA fully amortizing mortgage loan is made for sh.100,000 at 6 percent interest for 20 years.Required;Calculate the monthly payment for a CPM loan.What will the total of payments be for the entire 20-year period? Of this total, how much will be interest?Assume the loan is repaid at the end of 8 years. What will be the outstanding balance? How much total interest will have been collected by then?The borrower now chooses to reduce the loan balance by sh.5,000 at the end of year 8.What will be the new loan maturity assuming that loan payments are not reduced?Assume the loan maturity will not be reduced. What will the new payments be?
Problem 6 What is the annual equal amount of money you have to set aside to guarantee yourself an annual income to perpetuity of $15,000 starting in 41 years from now? You make the first payment in three years from now and the last payment in 40 years. Assume an interest rate of 7% (EAR).
* Question 11 What is the total amount you will have to repay for your $20,000 student loan if the interest rate is 5% APR with monthly compounding and you pay equal monthly payments over the 10 year life of the loan? Your Answer: Answer
Time to repay installment loan Personal Finance Problem Mia Salto wishes to determine how long it will take to repay a $17,000 loan given that the lender requires her to make annual end-of-year installment payments of $2,745. a. If the interest rate on the loan is 12%, how long will it take for her to repay the loan fully? b. How long will it take if the interest rate is 9%? c. How long will it take if she has to pay 15% annual interest? d. Reviewing your answers in parts a, b, and c, describe the general relationship between the interest rate and the amount of time it will take Mia to repay the loan fully.
Time to repay installment loan Personal Finance Problem Mia Salto wishes to determine how long it will take to repay a $18,000 loan given that the lender requires her to make annual end-of-year installment payments of $3,379. a. If the interest rate on the loan is 14%, how long will it take for her to repay the loan fully? b. How long will it take if the interest rate is 11%? c. How long will it take if she has to pay 18% annual interest? d. Reviewing your answers in parts a, b, and c, describe the general relationship between the interest rate and the amount of time it will take Mia to repay the loan fully. a. If Mia can borrow at an annual interest rate of 14%, the amount of time it will take for her to repay the loan fully is years. (Round to two decimal places.) C
Time to repay installment loan Personal Finance Problem Mia Salto wishes to determine how long it will take to repay a $18000 loan given that the lender requires her to make annual end-of-year installment payments of $3906. a. If the interest rate on the loan is 11%, how long will it take for her to repay the loan fully? b. How long will it take if the interest rate is 8%? c. How long will it take if she has to pay 14% annual interest? d. Reviewing your answers in parts a, b, and c, describe the general relationship between the interest rate and the amount of time it will take Mia to repay the loan fully.
Amortization Schedule Consider a $10,000 loan to be repaid in equal installments at the end of each of the next 5 years. The interest rate is 8%. How large must each annual payment be if the loan is for $20,000? Assume that the interest rate remains at 8% and that the loan is still paid off over 5 years. Round your answer to the nearest cent.$ _______ How large must each payment be if the loan is for $20,000, the interest rate is 8%, and the loan is paid off in equal installments at the end of each of the next 10 years? This loan is for the same amount as the loan in part b, but the payments are spread out over twice as many periods. Round your answer to the nearest cent.$ _______Why are these payments not half as large as the payments on the loan in part b?-Select one- I. Because the payments are spread out over a longer time period, more principal must be paid on the loan, which raises the amount of each payment. II. Because the payments are spread out over a longer time…
Problem 6 A person wants to establish an annuity for retirement purposes. He wants tomake quarterly deposits for 20 years so that he can then make quarterly withdrawals of$5,000 for 10 years. The annuity earns 7.32% interest compounded quarterly.(a) How much will have to be in the account at the time he retires?(b) How much should be deposited each quarter for 20 years in order to accumulate the Please give full solutionrequired amount?
QUESTION 13 Smith is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $450,000. Mortgage A has a 4.25% interest rate and requires Smith to pay 1.5 points upfront. Mortgage B has a 5% interest rate and requires Smith to pay zero fees upfront. Assuming Smith makes payments for 2 years before she sells the house and pays the bank the balance, what is Smith's Annualized IRR from mortgage A? Please Use Excel to Solve
PART 1 ORDINARY ANNUITY PROBLEM A. How much monthly deposit must be made for 7 years and 3 months in order to accumulate 24, 500 at 9% compounded monthly? B. What sum will be paid at the end of every three months for 5 years and 6 months if the present value is 25,000 and interest is paid at 6% compounded quarterly? C. Josh wants to buy a car worth 650,000. He can pay 100,000 down payment and the balance payable every end of the month for 5 years. How much must he pay monthly at 4% compounded monthly?
Step 1:Suppose that your Stafford loans plus accumulated interest total $31,811 at the time that you start repayment and the interest rate is 6.8% APR.If you elect the standard repayment plan of a fixed amount each month for 10 years, what is your monthly payment?(Fill in the blank below and round your answer to 2 decimal places.)Your monthly payment would be $______. STEP 2: How much will you pay in interest?(Fill in the blank below and round your answer to the nearest whole number.)You would pay a total of $______ in interest. STEP 3: However, because your accumulated outstanding federal loans total more than $30,000, you can elect to repay over 25 years instead.Fill in the blanks (Give your answers to two decimal places):If you do that:Your monthly payment would be $______.You will pay $______ in interest.Answer 1:Answer 2: