Lea buys a sala set. She pays P2, 500 down payment and pays P1, 200 per month for 2 years. If interest is charged at 6% compounded monthly, what is the cash equivalent of the sala set?

Q: Nina buys a piece of lot for P30,000 down payment and 8 deferred semi-annual payments of P 5,000…

A: Annuity: A contract between you and another party known as an annuity obligates the borrower to pay…

Q: ack buys a a car from a chant who offers P 748,000.00 at the end of 5 years. Jack wishes to pay…

A: As per the honor code of Bartleby we are bound to give the answer of first three sub part, please…

Q: Margo borrows $900, agreeing to pay it back with 4% annual interest after 14 months. How much…

A: The amount borrowed is recorded as principal amount and extra amount paid to pay off the loan at…

Q: a. Kim pays ₱2,000 every two months to settle his obligation for two years at 8% compounded…

A: a. The present value can be calculated using the PV Function.  b. The monthly payment can be…

Q: Nicole loans P900,000 from bank today which gives her 10% interest rate compounded annually. Based…

A: Loan amount (L) = P 900000 r = 10% n = 10 payments Let the annual payment = A

Q: Juan borrows $25,000 at 7% compounded annually. If the loan is repaid in five equal annual payments,…

A: What are installments? Installment is the sum of money to be paid in a particular time frame to pay…

Q: Carlo paid P 13,500 after two years to fully pay his loan that costs P 10,000. What is the interest…

A: Loan to be repaid on maturity = C* ( 1+i)n Where C is the amount of loan borrowed  i is the periodic…

Q: Jake paid 100,000 pesos as down payment for a farm. The remaining amount is to be settled by paying…

A: Time value of money (TVM) refers to the concept which proves that the value of money today is higher…

Q: Dottie wants to buy a 150,000 house and puts a down payment of 60,000. He makes monthly payments for…

A: Given:

Q: Benjamin borrows $50,000 from a lending institution for building a house. The lending institution…

A: The question is based on the concept of amortization of mortgage loans. A mortgage loan is paid back…

Q: b. Calculate the upfront amount that she should pay under the alternative payment agreement so that…

A: Equivalent value today is present value of both payments based on time and interest rate off money…

Q: Julie deposits $600 at the end of each month into her savings account. If the amount earns 5.25%…

A: In finance, the term annuity depicts a sequence of cash flows over a specific time duration. Each…

Q: Javion Minerva owes P25,000 due in 1 year and P75,000 due in 4 years. He agrees to pay P50,000 today…

A: Effective interest rate refers to the rate which is calculated by computing the effect of…

Q: Joyce pays P 2,000 every two months to settle his obligations for two years at 8% compounded…

A: Bimonthly payment (B) = P 2000 r = 8% compounded bimonthly = 8%/6 bimonthly = 1.3333% n = 2 years =…

Q: Carlos buys a house for 1,200,000 pesos. He makes a 20% down payment and the balance he takes a loan…

A: Solution: amount of loan = 1,200,000 * 80% = 960,000 Nos of monthly periods =15*12 = 180 Monthly…

Q: a car for R3250 making a down payment of R500. One month later he is to begin making a series of…

A: Loans are paid by monthly payments and these monthly payments carry the payment for interest and…

Q: A boy borrows 25000 from father. His father lends him the money, on the condition that he would be…

A: Here, Borrowed Amount is 25,000 First year monthly payment is 500 Interest Rate is 5.2% Compounding…

Q: Panpan purchased a car. She paid 250,000 as down payment, and 5,500 payable at the beginning of each…

A: Equivalent cash price refers to the equivalent present cost of the car at the time of purchase. It…

Q: A woman borrows $2000 and agrees to pay 9% annual simple interest on the loan.  She repays the loan,…

A: The amount owed is calculated as sum of principal and interest

Q: Polly purchased a car. She paid P150,000 as down payment and pays P5,500 at the end of each month…

A: Polly purchased a car and paid ₱ 1,50,000 as the down payment and thereafter pays ₱ 5500 at the end…

Q: Margo borrows $400, agreeing to pay it back with 8% annual interest after 17 months. How much…

A: We need to use simple interest formula to calculate interest to be paid by Margo. Interest =…

Q: Mariposa deposits $2500 in a n account with an APR of 5.5% for 10 years. How much interest will she…

A: Given information : Amount deposited = $2,500 Annual percentage rate (APR) = 5.5% Tenure = 10 years…

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: A couple want to buy a house that costs $542 000. They pay a 20% deposit and borrow the rest of the…

A: House value = $542,000 Loan amount (P) = House value * (1 - Down payment) Loan amount (P) = $542,000…

Q: Vanessa was supposed to make a payment of $3,500 in 2 years and another payment for $1,800 in 5…

A: Equivalent value today is the present value of both payments based on time and interest rate of…

Q: Abel wants to determine the amount of money he would obtain from the interest of PHP 2,000 at 16%…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: Margo borrows $600, agreeing to pay it back with 7% annual interest after 15 months. How much…

A: When a loan is repaid then the repayment amount included both the principal amount borrowed and the…

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: Karl borrows P200,000 and agrees to pay the principal and interest by making equal payments at the…

A: A loan refers to the amount borrowed from one person to the other person in exchange for the…

Q: Every three years, D will pay Mr. J 5,000 at 8% rate to settle his loan. Mr. D will use which…

A: An Annuity:- An annuity is a fixed amount of perodic payment that an individual receive or pay for a…

Q: Mrs. Lim's purchase contract for a house and lot specifies that she will pay $500,000 cash and…

A: Loans are paid by the equal monthly installments and these carry the payment for interest and also…

Q: Nancy takes out a $500,000 loan for 25 years at 4% monthly.  a) What is the monthly payment? b) What…

A: in this we have to calculate present value FACTOR and calculate monthly payments.

Q: Josean got a dining set for $ 1,279 to pay for monthly for two years. He will pay at an interest of…

A: To open the "PMT function" window - MS-Excel --> Formulas --> Financials --> PMT.

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.