In order to buy a car, you borrow $30,000 from a friend at 8%/year compounded monthly for 4 years. You plan to repay the loan with 48 equal monthly payments. Part a) How much are the monthly payments? $______ per month.

Q: You are financing a car worth $29039.30 including tax. The interest rate is 10.8% compounded daily.…

A: Loan amount (L) = $29039.30 - $1700 = $27339.30 Interest rate = 10.8% daily compounding (m = 365) n…

Q: 1. You are making car payments of $315/month for the next 3 years, you know that your car loan has…

A: In order to finance the purchase of an asset individual can take loan from the bank and repay the…

Q: You want to borrow $25,000 to buy a new car. Your annual interest rate is 6.2% over 4 years with…

A: Given: Loan borrowed = $25,000 Interest rate = 6.2% years = 4

Q: You have already saved $6975 to buy a used car. You invest this money in a certificate of deposit…

A: Future Value refers to the value of the current asset at any specified future date for a given…

Q: You need a $6000 loan to buy a used car.  Your bank offers a 4-year loan at 9% APR. Calculate your…

A: We have to use the following formula of the monthly payment by using the following formula: Monthly…

Q: You borrow $560,000 to purchase a home. The loan rate is 8.95% and must be repaid in 27 years. What…

A: Compound = Monthly = 12Present Value of Payment = pv = $560,000Interest Rate = r = 8.95 / 12%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: over 4 years with monthly payments. Calculate your monthly payment.

A: Information Provided: Amount borrowed = $15,000 Interest rate = 3.3% Term = 4 years or 48 months

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: 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: How much would you need to deposit in an account now in order to have $2000 in the account in 10…

A: Present value is the estimation of the current value of future cash value which is likely to be…

Q: You purchase a car priced at 750,000 Php. You paid 10% as the down payment and the remaining balance…

A: P= 675,000 (after down Payment) r= 0.4% (monthly) n= 10 yrs* 12months= 120 months Calculate interest…

Q: You have two monthly car payments of $400 each left on your car. If the interest rate is 0.75…

A: Monthly Payment (PMT) = $400Monthly interest rate (r) = 0.75% or 0.0075Number of periods (n) = 2…

Q: You want to save $20,000 to purchase a new car. You place $700 a month in a special savings account…

A: Calculation of number of periods: Answer: It will take 26.77 years to save an amount of $20,000

Q: Suppose that, to purchase a car, you are obtaining a personal loan from your uncle in the amount of…

A: Loan amount = $ 65000 Annual interest rate = 6% Period = 5 Years

Q: You lend a friend $50,000. Your friend will repay you in 6 equal annual end-of-year payments of…

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

Q: You have determined that you can afford to pay $800 per month toward a new Italian sports car. You…

A: Present value is the sum of money that must be invested in order to achieve a specific future goal.…

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

A: Given information: Purchase amount = $20,000 Down payment = $2,000 Loan Amount = $20,000 - $2,000 =…

Q: If you lend $3000 to a friend for 15 months at 8% annual simple interest, find the future value of…

A: Futre value of loan is calculated as follws:-FV= A+IwhereFV= future value of loanA= Amount of loan I…

Q: Use the Buying a Car information above to answer this question. The rebate offer is $1400, and you…

A: When a mortgage is to be had at a reduced quantity it's far referred to as a rebate offer. Under…

Q: You are buying a $10,000 second hand car with a down-payment of $3,000 and you finance the remaining…

A: Solution:- When a loan is taken, generally equal periodic installments are paid inclusive of…

Q: You are planning on buying a new car. You need to finance $32,500 for the purchase. The bank will…

A: Present value of annuity is computed by following formula:-PV = A*wherePV = Present value of…

Q: The remaining balance of your car loan would be

A: Remaining balance is the unpaid portion on the loan. It is the amount of money not yet paid to the…

Q: You want to buy a new car. You can afford payments of $425 per month and can borrow the money at an…

A: The objective of this question is to find out the total amount that can be borrowed given the…

Q: You wish to buy your first home. Your annual gross income is $84,000. You also have monthly payments…

A: Mortgage loans are given on the basis of monthly income and other expenses related to the housing…

Q: If you have a car loan with a monthly payment of $625.00 and a purchase price of $30,000 : a. How…

A: Given information,Monthly payment: Purchase price: Number of periods:  yearsCompounding frequency:…

Q: You want to buy a car and therefore you borrowed $10,000 from a bank today for 6 years. The nominal…

A: Monthly Payment: It is the amount that is paid at the end of each month to the lender of the bond by…

Q: You have decided to purchase a new car that costs $44,500. You need to make a 20% down payment, then…

A: Present value of annuity is computed as follows:-PV = A * wherePV = Present value of annuityA =…

Q: What is the amount you would have to deposit today to be able to take out $2070 a year for 2 years…

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

Q: After making the twenty-sixth payment on your car loan, you wanted to find out how much is left of…

A: Loan amount (PV) = $27000 Interest rate = 7.1% Monthly interest rate (r) = 7.1%/12 =…

Q: You buy a car costing $28,000 today. What will be the monthly payment on this car if you put no…

A: The present value of monthly repayment will be equal to the value of loan amount. Monthly interest…

Q: Suppose you want to borrow $20,000 for a new car. You can borrow 8% per year, compounded 8 monthly…

A: A monthly payment on a loan is a fixed amount of money that a borrower is required to repay to the…

Q: If you borrow $3,600 to buy a car at 15% per year compounded monthly, to be repaid over the next…

A: Monthly Payment = P x r / [1 - {1 / (1 + r)^n}] Here, P = Present Value or Loan Amount i.e. $3600 r…

Q: ANNUITY: Suppose you owe $1,500 on your VISA card and the interest rate is 2% per month. If you make…

A: An annuity is a financial product that provides a series of payments at regular intervals, typically…

Q: Suppose that you buy a car costing $14,000. You agree to make payments at the end of each monthly…

A: The payments made to purchase this car is a form of an annuity. Thus, the value of each payment can…

Q: You borrow $22947 to buy a car. You will have to repay this loan by making equal monthly payments…

A: In an annuity payment, the present value of all future annuity payments is calculated using the…

Q: You want to buy a car and therefore you borrowed $10,000 from a bank today for 6 years. The nominal…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: You receive a car loan of $22,000 and must pay off the loan in 60 monthly installments. If your…

A: The periodic payment for a loan can be found using the PMT Function in excel. PMT = (RATE, NPER, PV,…

Q: car for $18,500. Compare the two loan offers by finding the monthly payments for each and…

A: Loans are to be paid equal monthly payment that carry the payment for interest and payment for…

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.