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?

Q: Lauren plans to deposit $6000 into a bank account at the beginning of next month and $175/month into…

A: Future Value is the value which is measured at a specified date at a given interest rate,  it can be…

Q: Charisma is able to pay $1250 a month for a 25-year mortgage with end of month payments. Because of…

A: It is a case of loan amortization where the monthly payment is given with a 20% down payment done…

Q: A woman buys a house for a ​$260,000. She pays ​$20,000 down and takes out a mortgage at 5.1​% for…

A: Purchase Price of House = pp = $260,000Down Payment = dp = $20,000Compound = Monthly = 12Interest…

Q: Luis is expected to settle a loan by paying $5,500. What amount should she pay if she decides to…

A: To calculate the amount Luis should pay if she decides to settle the loan seven months earlier, we…

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: Lauren plans to deposit $5000 into a bank account at the beginning of next month and $200/month into…

A: Future value is the amount accumulated on the deposit made along with interest earned on the…

Q: Martha Diaz needs an investment loan. She gets a simple interest amortized loan for $12,000 at 8.5 %…

A: Interest is the cost of borrowing the money.

Q: how much will Lauren have in her account at the end of 6 years? (Assume she makes no withdrawals…

A: The future value (FV) is a financial concept that represents the worth or value of a sum of money at…

Q: Ava Darling plans to buy a home and can deposit $1,772 per year for the next 5 years.. If the annual…

A: To calculate the future value of Ava Darling's deposits for the down payment, we can use the future…

Q: Lauren plans to deposit $5000 into a bank account at the beginning of next month and $150/month into…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Jack borrows $28,163 to pay for a car. The loan carries an annual rate of 5.7% and he wants to be…

A: ANSWER: Interest on loan = $6,021.6163328  (or) $6,022 EXPLANATION:- Present Value (PV) = $28,163…

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: Alice borrowed $8,000 from her grandmother to buy The interest rate being charged is 4.5% compounded…

A: The present value of annuity due refers to the current value of a series of future payments. The…

Q: Carol borrows $27,663 to help pay for expenses. The loan is for 7 years and carries an annual rate…

A: Amortization is a financial concept that refers to the gradual repayment of a debt, typically…

Q: Janet's parents want her to go to the same college that they did. They decided to pay a lump sum…

A: The question is based on the concept of Present value

Q: Inez wants to borrow $2100 to start a small business.  She has found a bank that offers a 7% add on…

A: Calculation of Monthly Payment:The monthly payment is $47.25.Excel Spreadsheet:

Q: Gwen decides to make regular deposits every month into an account that earns 8% annual interest,…

A: The question is based on concept of present value and future value of money .  formula as: FV=pmt…

Q: Indira is planning for her retirement. She calculates she will need to withdraw quarterly payments…

A: An Annuity is a continuous flow of systematic timely cash flows made or received for a stipulated…

Q: Lisa has another option for her plan to buy a new house: Using $150,000 as a deposit and get a…

A: Compounding is an important technique which increases the effective interest rate. Effective…

Q: Margarita borrows R10,000 from her uncle and agrees to repay it in monthly instalments of R200. Her…

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

Q: Kent owes $38000 with an interest rate of 4% in the student loans. If the loan will be paid after 2…

A: If the loan is a bullet loan that has to be paid at the end in a single payment then, the interest…

Q: Almirah wants to have P50,000 at the end of 4 years for her graduation expenses and blow-out party.…

A: Investor always prefers compounding interest rather than investing in investments that offer simple…

Q: Allison is considering paying $400 a year for an extended warranty on several of her major…

A: Rate of interest =2% Period =5 years  Payment =$400 per year  Future value FACTOR =(1+r)n/r Future…

Q: Olivia plans to secure a 5-year balloon mortgage of $210,000 toward the purchase of a condominium.…

A: Olivia secures a balloon payment mortgage for a condominium of $210,000. The loan was amortized for…

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: a wants to give her daughter Mara a financial gift on the latter's college graduation two years now.…

A: Solved using Financial Calculator  PV = -2,000 FV = 5,000 N = 2 years * 4 quarters = 8 CPT I/Y =…

Q: you want to establish a perpetuity that pays $6500 per year. Your banker will establish such an…

A: Solution:Perpetuity refers to the equal cash flow per period forever.We know, value of perpetuity =…

Q: Sarah secured a bank loan of $155,000 for the purchase of a house. The mortgage is to be amortized…

A: When a loan is taken to buy a big ticket item like a house the borrower usually makes monthly…

Q: Leon wants to save a classic car so he deposits $1500 at the end of the years into a savings account…

A: We need to use future value of ordinary annuity formula to calculate worth of deposit after 5 years.…

Q: What semi-annual deposits does Adrian have to make?

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

Q: Lucky Louie wants to buy a car that costs $26,750. The interest rate on his loan is 5.33 percent…

A: Car cost = 26750 Interest on loan = 5.33% Years = 7 Compounded = Monthly  PMT find out using Excel:…

Q: At an interest rate of 7 - %, Karen borrows $4,000 for 13 years. How much interest will she pay?

A: Concept: The interest is the product of principal, time period and number of years that is divided…

Q: 0-year conventio hat will be her m monthly payment alloon payment ner

A: Introduction: Under a mortgage balloon payments, the borrower will make regular monthly payments for…

Q: Tika has $10 000 that he can deposit into a savings account for 5 years. ANZ pays compounds interest…

A: Time value of money- It is based on the concept that money earned today is worth more than similar…

Q: Patty purchases a $240,000 house. She pays $40,000 down and takes out a 25 year mortgage with…

A: MortgagesA mortgage is a legal agreement between a lender and a borrower in which the borrower…

Q: Alexandria wants to receive $12,000 a year for 8 years. How much must Alexandria invest today in an…

A: Computation:

Q: Dolph can afford a monthly car payment of $418 for the next 5 years, with the first payment…

A: It is a case where the amount of loan to be borrowed by Dolph is to be calculated, based on his…

Q: Gerritt wants to buy a car that costs $30,750. The interest rate on his loan is 5.65 percent…

A:

Q: Shelly deposits the $2000 she got as a birthday gift from her grandmother into an account earning…

A: The company would be considering the value for future through the compounding of interest rates over…

Q: Emma plans to loan $1,000 to her friend, who will pay a simple interest rate of 5.8% every year for…

A: The objective of the question is to calculate the amount of money Emma's friend will owe her after…

Q: Joshua borrows 35,000 pesos from a cooperative to buy a laptop. He will repay the loan in equal…

A: Borrowing refers to the act of taking money from another party with known intention to repay that…

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.