Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Cash Call is a popular payday loan company offering consumer loans in person or online.

On their website, they describe the terms of a $2600 installment loan at an effective APR of 139.13% (compounded monthly). The actual terms of the loan are a principal amount borrowed of $2600 with a $75 origination fee at 135% APR compounded monthly paid back over 47 monthly payments.

In your calculations, use Y = 47/12 or 3.916667.

PMT= P(APR/n)/[1-(1+APR/n)^(-nY)]

a. Calculate the monthly payment for a $2600 loan at 135% APR over 47 months.


Monthly Payment: $ _____________
b. Compute the total of all payments, not including the $75 loan fee. (Use your rounded answer from part a.)


Total Payments: $ _____________
c. How much of the total payments (answer to part b) is interest?


Interest: $ _____________

### Case Study Summary: Cash Loans

---

#### Loans, Fast & Simple:

**Select the amount you need to borrow:**

- $100,000 Loan
- $75,000 Loan
- $50,000 Loan
- $25,000 Loan
- $10,000 Loan
- $5,000 Loan
- $2,000 Loan

---

**Instructions for Users:**

**a. Calculate the monthly payments.**

---

This case study summary provides an overview of loan options with varying amounts ranging from $2,000 to $100,000. The interface appears to be user-friendly, allowing individuals to select the amount they wish to borrow for a fast and simple loan process. To further assist users in financial planning, the case study prompts users to calculate the monthly payments associated with each loan amount.

For educational purposes, users are encouraged to utilize financial formulas or loan calculators that consider interest rates and loan durations to determine accurate monthly payments. This practice will help in understanding the implications of different loan amounts on personal finances.
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Transcribed Image Text:### Case Study Summary: Cash Loans --- #### Loans, Fast & Simple: **Select the amount you need to borrow:** - $100,000 Loan - $75,000 Loan - $50,000 Loan - $25,000 Loan - $10,000 Loan - $5,000 Loan - $2,000 Loan --- **Instructions for Users:** **a. Calculate the monthly payments.** --- This case study summary provides an overview of loan options with varying amounts ranging from $2,000 to $100,000. The interface appears to be user-friendly, allowing individuals to select the amount they wish to borrow for a fast and simple loan process. To further assist users in financial planning, the case study prompts users to calculate the monthly payments associated with each loan amount. For educational purposes, users are encouraged to utilize financial formulas or loan calculators that consider interest rates and loan durations to determine accurate monthly payments. This practice will help in understanding the implications of different loan amounts on personal finances.
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