Joshua borrows 35,000 pesos from a cooperative to buy a laptop. He will repay the loan in equal monthly payments over 2 years at the end of each month. If he is charged 10% interest compounded monthly, how much is his monthly payment? What is the total amount that he repays?

Joshua borrows 35,000 pesos from a cooperative to buy a laptop. He will repay the loan in equal monthly payments over 2 years at the end of each month. If he is charged 10% interest compounded monthly, how much is his monthly payment? What is the total amount that he repays?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 25PROB

See similar textbooks

Related questions

Q: Sam took a $5000 loan to build a deck in the backyard. The loan requires payments at the end of each…

A: Converting rate of interest from 9% compounded monthly to quarterly Effective rate of interest =…

Q: Kiki bought a computer for Rp. 8,000,000, -. If he bought it With credit, he must prepare advance…

A: The portion of the purchase price of goods and services that are paid immediately at the time of…

Q: A person needs $18,000 immediately as a down payment on a new home. Suppose that she can borrow…

A: Continuously compounded interest rate refers to the interest rate that is calculated on the…

Q: Ian loaned his friend $25,000 to start a new business. He considers this loan to be an investment,…

A: Calculation of annual payment and capital recovery schedule: Answer: The annual payment is $7,716.72

Q: Gabriel is able to save 10,000 pesos every month from his salary. If he decides to invest in a…

A: >Future value of any amount invested is the sum total of amount invested and the interest earned…

Q: Taylor Swift, a college student of USEP decides to get a student loan amounting to $4,000 with an…

A: Amortized Loan: Amortized loan is a type of loan in which the borrower would pay periodic payments…

Q: Aidan deposits $1000 at the end of each quarter in an account that pays 5.25% per year, compounded…

A: Solution: An equal amount invested every period is called annuity. So, future value of annuity = PMT…

Q: Mr. Cama borrowed one million pesos from a bank to buy a house which he would pay in 15 years. How…

A: Calculation of monthly payment to be paid on the loan if compounded annually::: Cost of the…

Q: Nick saves $175 per month, deposited directly into his credit union account on payday, the last day…

A: In order to calculate the amount at the end of a specific period of time, the future value of the…

Q: Joel is considering putting a $4300 laptop purchase on his credit card, which has an interest rate…

A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

Q: Robert wants to deposit $300 into a fund at the beginning of each month. If he can earn 10%…

A: Given information : Monthly deposit = $300 Interest rate = 10% Tenure = 6 years

Q: John took a personal loan of $100,000 from the bank at a nominal interest rate of 6% per year…

A: Disclaimer: “Since you have asked multiple questions, we will solve the first question for you. If…

Q: Dan opens a line of credit at a local bank, and immediately borrows 2080 dollars. 5 months later, he…

A: A financial instrument that provides never-ending borrowing and paying facility to the borrowers is…

Q: Roberto and Micah plan to purchase a home for $225,000. They will pay 20% down and finance the…

A: Monthly installment = loan / cumulative PV factor Monthly installment = loan / PVAIF (0.308333%,…

Q: How much should Ryan have in a savings account that is earning 2.50% compounded monthly, if he plans…

A: Present Value of Annuity: It represents the present worth of the future cash flows stream and is…

Q: Taylor will make payments of $150 at the end of every month to settle a loan of $1,300 at 5.10%…

A: Montly payment(PMT) = $150 Loan Amount = $1,300 Rate = 5.10% Compounded semi- annually

Q: Patrick makes payments of $250 per month at the end of each month. At the end of 10 years, he wants…

A: The rate of interest required to have the desired amount can be calculated with the help of rate…

Q: Suppose that Jacob would like to invest at the end of each month for the next 15 years into an…

A: Ordinary Annuity refers to series of equalized payments that are made at end of period for certain…

Q: Joe secured a loan of $15,000 two years ago from a bank for use toward his college expenses. The…

A: Monthly payment The minimum value that is required to be paid each month by an individual for the…

Q: Ken is paying P2,500 every 3 months for the amount he borrowed at an interest rate of 8% compounded…

A: Answer: Calculation of the amount that Ken borrowed: The amount that Ken borrowed will be equal to…

Q: William recently graduated from NFA University. While at NFA, William took out 4-23 a $50,000…

Q: Larry has decided to take out a loan for college. He expects to graduate 5 years and 6 months later…

A: Interest rate is the rate of interest earned/paid on an investment/loan. The interest will be paid…

Q: Joel is considering putting a $2400 laptop purchase on his credit card, which has an interest rate…

A: When something is purchased on credit, the amount can either be paid as a lump sum or in…

Q: how much interest will mico pay

A: PV = A[ (1-(1/(1+r)^n)/ r] Where PV = present value, A = Annuity amount. r = interest rate. n =…

Q: Sergio purchased a house for $440,000; he paid $44000 as a down payment and financed the balance…

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

Q: Akbar has borrowed $48,000 today and agreed to repay it in 5 years with monthly payments at the…

A: Given information: Amount borrowed is $48,000 Interest rate is 2.60% Number of years is 5 years

Q: Five years ago, a person borrowed $100,000 at an interest rate of 8% per year compounded…

A: Given, The loan amount is $100,000 Interest rate is 8%

Q: Joe borrowed $100,000 from a local bank, which charges him an interest rate of 7% per year. If Joe…

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

Q: Johnny has a loan for $50,000 at a rate of i(4) = 8% on which he makes quarterly payments of $2,000.…

A: Amount of deposit every 3 months: $500 starting from today at a rate of interest of 1% effectively.…

Q: Helen is buying a $12,375 car with a $3000 down payment, followed by 36 monthly payments of $325…

A: Given data; Price of car = $ 12,375 down payment = $ 3000 number of payments = 36 monthly payment =…

Q: Sam's family has decided that they will start depositing $100 at the end of every month into a…

A: Monthly Deposit = 100 End of month deposits Time Period = 3 years or 36 months Interest Rate = 4.6%…

Q: Bryce and David plan to purchase a home for $176,000. They will pay 20% down and finance the…

A: Down payment = 20% Loan (L) = 80% of $176000 = $140800 n = 15 years = 180 months r = 8.2% per annum…

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: John contributes $5,000 per month into an account. How much will he have in the account after 25…

A: In the given question we require to calculate the future value of account after 25 years is john…

Q: Kristen purchased a car for $43,000; she paid $2150 as a down payment and financed the balance…

A: Using excel NPER and PMT function

Q: To pay for your education, you've taken out $18,000 in student loans. If you make monthly payments…

A: Loan Amount = $18,000 Time Period = 10 Years Interest Rate = 3% compounded monthly

Q: While Kate was a student at SA University, she borrowed $16,000 in student loan at an annual…

A: The concept of the present value implies that the money today is having more worth than the money…

Q: In 6 years Harry and Sally would like to have $24000 for a down payment on a house. How much should…

A: In this question we need to compute the each month deposit to have $24000 for down payment in 6…

Q: How much should Timothy's dad invest into a savings account today, to be able to pay for Timothy's…

A: Solution:- When an equal amount is deposited each period at beginning of period, it is called…

Q: Joel is considering putting a $4300 laptop purchase on his credit card, which has an interest rate…

A: Value of loan increase at mentioned rate for a loan duration. This FV can be computed by using…

Q: Daniel deposits $20,000 into an account earning interest at 6% per year compounded monthly. He…

A: Information Provided: Initial deposit = $20,000 Interest = 6% compounded monthly Withdrawal = $1200…

Q: Hugo loaned P200,000 from a local bank to be paid back uniformly in five years. How much will he pay…

A: The given problem can be solved using PMT function in excel. PMT function computes installment…

Q: Darwin is a young entrepreneur trying to keep his business afloat. He has missed two payments to a…

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

Q: An individual needs $12,000 immediately as a down payment on a new home. Suppose that he can borrow…

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

Q: Craig is saving for a $3500 sound system. He plans to deposit $175 at the end of every 3 months into…

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

Q: Rebecca Carlson purchases a car for $25,000 and finances her purchase by borrowing the money at 8%…

A: Equated Monthly Installments is one part of the equally divided monthly outgoes to clear off an…

Q: Dana has made a down payment of $100,000 on a recent home purchase for $300,000. She was able to…

A: Using excel PMT function

Q: Mike has a credit card balance of $30,000. The annual interest rate is 17%. He is required to pay a…

A: Credit Balance $ 30,000.00 Annual Interest Rate 17% Minimum Payment 4% or $ 50.00…

Q: Cathy borrowed $24,000 to buy a new car and expects to pay $400 per month for the next 3 years to…

A: Compound interest is also interest on interest that is the interest which is accumulated on the…

Concept explainers

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.

Question

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

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

Joshua borrows 35,000 pesos from a cooperative to buy a laptop. He will repay the loan in equal monthly payments over 2 years at the end of each month. If he is charged 10% interest compounded monthly, how much is his monthly payment? What is the total amount that he repays? (step-by-step solution, I can't understand excel)
Megan takes out a car loan for $13,000. She intends to make monthly payments for 5 years to pay off her loan. If the bank charges her an annual interest rate of 4.2% computed monthly on the loan balance, how much will her monthly payments be?
Rebecca Carlson purchases a car for $25,000 and finances her purchase by borrowing the money at 8% per year compounded monthly; she pays off the loan with equal monthly payments for 5 years. What will be the size of her monthly loan payment?
Mr. Cama borrowed one million pesos from a bank to buy a house which he would pay in 15 years. How much is the monthly payment for this loan if 5% interest compounded annually is charged against the loan?
Jessica wants to accumulate $13,000 by the end of 6 years in a special bank account, which she had opened for this purpose. To achieve this goal, Jessica plans to deposit a fixed sum of money into the account at the end of the month over the 6-year period. If the bank pays interest at the rate of 5% per year compounded monthly, how much does she have to deposit each month into her account? (Round your answer to the nearest cent.)
Manuel plans to set aside money for his young daughter’s college tuition. He will deposit money in an ordinary annuity that earns 5.4% interest, compounded monthly. Deposits will be made at the end of each month. How much money does he need to deposit into the annuity each month for the annuity to have a total value of $72,000 after 16 years?
Jack borrows $28,163 to pay for a car. The loan carries an annual rate of 5.7% and he wants to be debt free in 7 years by making biweekly payments (26 per year). How much interest will he pay on this loan? Round your answer to the nearest dollar.
Your grandmother set up an annuity, in which she will receive a monthly payment from the bank of $1200 per month, payable at the beginning of each month. She paid $200,000 for this annuity. The bank says they are paying an interest rate of 4%. How many months does the bank plan to pay the annuity?
Tika has $10 000 that he can deposit into a savings account for 5 years. ANZ pays compounds interest annually, Bankwest twice a year, and Bendigo quarterly. Each bank has a stated interest rate of 6 percent. What amount would Tika have at the end of the fifth year if he left all the interest paid on the deposit in each bank?
Gabriel is able to save 10,000 pesos every month from his salary. If he decides to invest in a special deposit account offering an interest rate of 5% annually, how much money would he have at the end of 3 years?
Chris decides to take out a loan for $60, 000 for 6 years at 5% monthly. If he pays an extra $200 per month. when will the loan be paid off and how much interest will be saved?
George borrows $43,000 to buy a car. He will repay the loan through 4 years of equal monthly payments and an annualized interest rate of 3.9%. Think about payment #44 of the loan obligation. How much of this payment will be interest? Enter your answer as a positive number (in dollars), and round to the nearest dollar.