A student graduates from college with $49,000 in student loans with a 6.8% annual simple interest rate. In order to reduce his debt as quickly as possible, beginning next month he is going to pay $800 per month towards the loan. After his first payment, how much will he owe on the loan?

A student graduates from college with $49,000 in student loans with a 6.8% annual simple interest rate. In order to reduce his debt as quickly as possible, beginning next month he is going to pay $800 per month towards the loan. After his first payment, how much will he owe on the loan?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 15P

See similar textbooks

Related questions

Q: Suppose you borrowed Php 30,000 on a student loan at a rate of 8% and must repay it in three (3)…

A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…

Q: On September 1, 2018, you bought a used car for $37,000. You paid $2,000 down and financed the…

A: From the given information first monthl payment on the loan is calculated and then using the monthl…

Q: ou can afford a $1,250.00 per month mortgage payment. You can get a loan at 7% interest for 30…

A: When we make a mortgage payment we pay fixed monthly amounts as payments towards the mortgage.…

Q: Today, a businessman borrowed money to be paid in 10 equal quarterly payments starting at the end 2…

A: Quarterly payment (P) = P 2000 Annual interest rate = 10% Quarterly interest rate (r) = 10%/4 =…

Q: ou have just purchased a home by borrowing \$400,000$400,000 for 30-years at a fixed APR of 3.87%.…

A: GIVEN, P = $400,000 N = 30 YEARS APR = 3.87% M = 12 (MONTHLY )

Q: 1.) To pay for your education, you’ve taken out RM25,000 in student loans. If you make monthly…

A: Present Value of Ordinary Annuity refers to a concept that determines the value of cash flows at…

Q: a) Nancy takes a personal loan and will repay the loan by 6 quarterly deposits of $5,000 starting in…

A: Loan and its repayments: A loan taken is repaid either in periodic fixed/variable instalments over…

Q: A student graduates from college with a 58000 student loan, with an 8.8% annual simple interest…

A: Simple interest: It is the amount of interest that is computed by multiplying the interest rate with…

Q: This question is from part B. a. The going rate on student loans is quoted as 8 per cent APR. The…

Q: A student graduates from college with 48000 in student loans with a 5.5% annual simple interest…

A: In the given question we require to calculate the amount of loan due after the first payment.…

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: 1. Nelson wants to buy a car that costs $42,000. He has arranged to borrow the total purchase price…

A: Using the PMT function in excel

Q: If Phil borrows $40,000 from a loan company at an interest rate of 6.5% per year compounded weekly,…

A: Here, Loan amount = $40,000 Quarterly payment of the loan = $800 Interest rate = 6.5% compounded…

Q: You want to buy a car, and a local bank will lend you $10,000. The loan would be fully amortized…

A: "Hi, As you posted multiple questions, we will answer the first question for you as per guidelines.…

Q: A student plan to deposit P1, 500 in the bank now and another P3, 000 for the next 2 years. If he…

A: Year Deposit Interest Balance 1. 1500 150 1650 2. 3000 165 + 300 5115 3. 3000 511.5 + 300…

Q: Hamilton wants to accumulate ₺ 24.000 at the end of 4 years. It starts quarterly payments in a bank…

A: Amount at the end of 4 years = 24000 Years = 4 Terms(n) = 4 *4 = 16 quarterly deposits Rate (r) = 6%…

Q: how much would you save or lose by taking the debt consolidation company’s offer?

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

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: Mr Teo wants to buy a house. His annual income is $48,000. The bank is willing to lend an amount…

A: As your question contains multiple subparts, we would be answering first three only. To get the…

Q: "Assume you graduate with $31,300 in student loans with an interest rate of 5.25% compounded…

A: The loan amount consists present value of all future payments.It is given that,Loan amount is…

Q: How much are the monthly payments?

A: An interest is charged by bank or financial institutions over the borrowed amount. The sum payable…

Q: Ken is paying off a loan by making a $50 down payment and then $50 payments at the end of every…

A: Loan is the amount borrowed by the company or individual for the purpose of fulfilling the financial…

Q: You purchase a home and secure a 30 year equal payment loan for $200,000 at a interest rate of 5.25%…

A: The number of months to stay will be around 6 months.

Q: A student needs to borrow $7,000 to pay for college. She can get a loan at an APR of 10% to paid off…

A: We need to calculate total payment by using the loan amortization formula. Fist we need to calculate…

Q: 1. Chris has saved $6500 towards buying a car which is valued at $23,500. They plan to borrow the…

A: Interest: It is the amount that is paid by the borrower to the lender for taking a loan. It is paid…

Q: Assume that you have purchased a new car and after your down payment, you borrowed $10,000 from a…

A: Monthly payment can be calculated using the present vale of annuity formula. Present value of…

Q: William wants to borrow $42,000.00 today to purchase a car, which bank's lending option will allow…

A: Present Value of annuity formula is used to check if the loan present value of periodic payments.…

Q: a. The going rate on student loans is quoted as 8 per cent APR. The terms of the loans call for…

A: As per Bartleby Honor Code, when multiple independent questions are asked, the expert is required…

Q: (c) Alata Kwaku borrowed ¢2,130 from his uncle and promised to pay him ¢2,720 after 2 years. With…

A: c) Given, Future value of borrowed amount = ¢2,720 Present value borrowed amount = ¢2130 number of…

Q: A person spent 7000 TL with a credit card and could not pay his debt. Credit card applies 36%…

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

Q: he college tuition is expected to increase with an average of 5% per year for the next 5 years. The…

A: We will use the concept of time value of money here. As per the concept of time value of money the…

Q: A college student receives an interest free loan of $8250 from a relative. The student will repay…

A: Amount remaining to be paid is given by: Amount remaining to be paid = Actual amount - Amount paid…

Q: A student takes out a college loan of $4000 at an annual percentage rate of 5%, compounded monthly.…

A: PV 4000 RATE 5% COMPOUNDING PER YEAR 12 PMT 200 TIME PMT PRINCIPAL…

Q: payment

A: Monthly payments are nothing but the payment which has to be made by the borrower every month. The…

Q: Brendon Walsh wants to borrow $40,000 from the bank. The interest rate is 6% and the term is for 5…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

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: Suppose that you take out an unsubsidized Stafford loan on September 1 before your junior year for…

A: An unsubsidized student loan is a loan on which interest starts accruing the day money is deposited…

Q: Derrick recently graduated. He owes $17,525 in student loans with APR of 4.6% compounded monthly. He…

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

Q: A borrower had a loan of $70,000.00 at 6% compounded annually, with 8 annual payments. Suppose the…

A: The question is based on the concept of Loan & Amortization.

Q: o complete your last year in business school and then go through law school, you will need $20,000…

A: Calculation of Amount of Deposits and Amount of Deposits after first and last withdrawal: The amount…

Q: Suppose you get a student loan for $8,000, and your payments are deferred until after you graduate,…

A: Present value of Annuity is the current value of payments made over a specified period of time at a…

Q: Starting next year, you will need $5,000 annually for 4years to complete your education. (One year…

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

Q: College students are now graduating with loan debts averaging $24,000. Solve, a. If students repay…

A: Given information: Loan amount is $24,000 Number of years is 10 Effective interest rate is 8.30%

Q: William wants to borrow $42,000.00 today to purchase a car, which bank's lending option will allow…

A: Because you have posted multiple questions, we will answer the first question nly , for the…

Q: A). Sun will be starting a 5-year training program in 23 months’ time. His mother, Moon, has…

A: Note: It is a case where the number of questions asked is more than one and no specified question is…

Question

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

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

Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.
A student graduates from college with a 58000 student loan, with an 8.8% annual simple interest rate. In order to reduce the debt as quickly as possible, beginning next month he is going to pay $900 per month towards the loan. After the first payment, how much will he owe on the loan?
You finance your college education with a student loan. Every month, you borrow $1,000 to pay for living expenses. While in college, you do not have to pay interest on the loan, nor do you need to pay back any loan principal. However, the interest accrues to your loan balance. Assume an annual interest rate of 6% on your student loan, what will be your loan balance when you graduate in four years (round your answer to the nearest dollar)? $52,495 None of these are correct $48,000 $54,098 50,880
A student graduates from college with $31,000 in student loans with a 5.6% annual simple interest rate. In order to reduce his debt as quickly as possible, beginning next month he is going to pay $600 per month towards the loan. After his first payment, how much will he owe on the loan? After his first payment, he will still owe $ (Round to the nearest cent as needed.) on his loan.
A student graduates from college with 48000 in student loans with a 5.5% annual simple interest rate. To reduce his debt beginning next month, he will pay 800 per month towards the loan. after his first payment how much will he still owe?
A man plans to take a vacation in 4 years. He wants to buy a certificate of deposit for $1200 that he will cash in for the trip. What is the minimum annual interest rate he must obtain on the certificate if he needs at least $1700 for the trip? Assume that the interest on the loan is computed using simple interest The rate he must obtain is ___%
A student borrows $2500 from his uncle in order to finish school. His uncle agrees to charge him simple interest at the rate of 3.7% per year. Suppose that the student waits 3.7 years and then repays the entire loan. How much interest will he have to pay?
Suppose that you take out an unsubsidized Stafford loan on September 1 before your junior year for $45004500 and plan to begin paying it back on December 1 after graduation and grace period 27 months later. The interest rate is 6.8%. How much of what you will owe will be interest?$Round your answer to the nearest cent.
A man plans to take a vacation in 5 years. He wants to buy a certificate of deposit for $1300 that he will cash in for the trip. What is the minimum annual interest rate he must obtain on the certificate if he needs at least $1500 for the trip? Assume that the interest on the loan is computed using simple interest. The rate he must obtain is
You have an outstanding student loan with required payments of $500 per month for the next four years. The interest rate on the loan is 9.00% APR (monthly). You are considering making an extra payment of $200 today (i.e., you will pay an extra $200 that you are not required to pay). If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? What effective rate of retum (expressed as an APR with monthly compounding) have you eamed on the $200? (Note: Be careful not to round any intermediate steps less than six decimal places.) If you are required to continue to make payments of $500 per month until the loan is paid off, what is the amount of your final payment? The final payment is $ (Round to the nearest cent.)
Dr. Dennis Natali plans to take advantage of 0% interest balance transfer credit card offer to pay off a $7250 loan he has.if his loan is at 7.5% interest for 12 months ,what is his payment? How much will he save in interest?
After graduation, you decide that you can pay $203.24 per month extra on your student loan ( standard monthly payment is 302.99), which has a balance of $50,000 and 20 years of monthly payments remaining. The annual interest rate on the loan is 4% How many years early will you be able to pay off the loan? Please answer in excel.