After examining the various personal loan rates available toy, you find the can borrow funds from an investment company at 12% Compounded monthly or from a bank at 13% compounded annually. Which alternative is the most attractive?

Q: Suppose that you decide to buy a car for $26,635, including taxes and license fees. You saved $7000…

A: Car Value = $ 26,635Down payment =$ 7000Loan Amount = Car Value - Down paymentLoan Amount = $ 26,635…

Q: Problem 1: Sandy wants to have an income of $8300 per year from investments. To that end she is…

A: Solution 1:- When an amount is invested somewhere, it earns interest on it. In case of simple…

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A: Given, that the payments in month 3,6,9,12 is double than the normal payments in other months.…

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A: Here, To Find: Part A. Amount paid for points on the closing of the loan =? Part B. Decision from…

Q: suppose that you decide to borrow $15,000 for a new car. you can select one of the following loans,…

A: a.Loan ALoan Amount (pv) = $15,000Interest Rate (rate) = 5.9%Time Period = 3 YearsNumber of Payments…

Q: Please show all steps and formulas in an excel spreadsheet to answer a. through g. using the…

A: Excel Spreadsheet to Solve Loan Questionsa. Loan AmountInput the house price in cell A1:…

Q: Suppose you borrow money from your parents for college tuition on January​ 1, 2019. Your parents…

A: The cost of college tuition fees would be equal to the present value of all future payments.

Q: your home was recently appraised for $176,000. The balance on your existing mortgage is $111,500. If…

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Q: After doing a complex amortization calculation to find the payment, we often will calculate how much…

A: Monthly payment I = $312Period = 5 yearsMonthly payment II = $837Period = 30 yearsTo find: Total…

Q: Your firm is considering two​ one-year loan options for a $506,000 loan. The first carries fees of…

A: A loan is an agreement where a party forwards a sum to another party in return for that sum being…

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Q: You want to buy a home.  You can borrow 95% of the purchase price.  Assuming you can make a down…

A: To calculate the price of home we will use the below  formula   Home price = Down payment/(1-Loan to…

Q: If I purchased a car loan for Php 800,000 with an annual rate of 15% for 5 years, how will I able to…

A: Loan amount (P)= Php 800,000 Annual rate (R)= 15%  Time (T)= 5 years S.I. and C.I.=?

Q: Explain to a friend or relative how you would use the TVM concept to achieve their desired…

A: Time value of money: It represents the concept that the current value of funds is worth more than…

Q: Suppose you are in charge of annuities for a life insurance company. A customer comes in and wants…

A: Annuity amount =1,000,000 Lets assume Remaining Life =55 years Life in months =660 Interest rate 7%…

Q: Zachary Porter of Abilene, Kansas, is contemplating borrowing $10,000 from his bank. The bank could…

A: Add-on Method As per this method, the interest is calculated at the start of the loan. It is then…

Q: Suppose you have the following three student loans: $11,000 with an APR of 8.5% for 12 years,…

A: Here,First LoanSecond LoanThird LoanLoan Amount $  11,000.00 $  17,000.00 $…

Q: You have saved $14000 for a down payment on a house. Your bank requires a minimum down payment of…

A: A down payment is a sum of money that the borrower contributes up ahead towards the cost of a loan…

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A: The provided information are: Amount being borrowed from bank = $10,000 Rate of interest (i) = 6.5%…

Q: Use the PMT function or your buy/rent calculator. You bought a house for $650,000 and had an LTV of…

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Q: How much would you be willing to pay for this investment if you required a 12 percent rate of…

A: Present Value of Annuity: It represents the present worth of the future annuity stream of cash…

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A: The borrowing options can be compared by making a comparison between deferred repayment amount…

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Q: Zachary Porter of Abilene, Kansas, is contemplating borrowing $10,000 from his bank. The bank could…

A: The provided information are: Amount being borrowed from bank = $10,000 Rate of interest (i) = 7% =…

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Q: Please build an excel spreadsheet and show the formulas  to answer a. through g. using the…

A: See the answer in the explanation field.Explanation:Answer information:Step 1:a) Loan Amount = Price…

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A: Assumption: It is assumed that the time period of the loan is 10 years.

Q: ou have agreed to loan some money to a friend at a simple interest rate of 62% your friend needs a…

A: Rate = 62% Principal = $1470 Maturity Value =$3200 Interest = $3200 -$1470 Interest = $1730

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A: Two different savings options are there. We have to find the sum invested in each of them.

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.