Suppose you borrowed $25,000 at a rate of 8.5% and must repay it in 5 equal installments at the end of each of the next 5 years. By how much would you reduce the amount you owe in the first year? a. $5,108.30 b. $5,920.99 c. $5,572.70 Od. $4,469.77 Oe. $5,804.89

Q: Calculate the amount of simple interest payable if a person borrowed $25 500 at a simple interest…

A: Simple interest is the method of calculating interest when the interest earned does not get…

Q: A. B., ) How much will you have in the account in 7 years? 5.) How much interest will you have…

A: Since you have asked multiple questions, we will answer the first question. If you want any specific…

Q: You borrow $11,000 over a 5-year term. The loan is structured as an amortized loan with annual…

A: Loan installment is that which is paid by borrower to lender for a specified period of time. This…

Q: (1) The total amount of a loan to which interest has been added is P 200,000. The term of the loan…

A: Data given: Total interest = P200,000 t=4.5 years Simple interest = 6%   Formula for simple interest…

Q: 6. If you deposit $4,000 now, $5,000 at the end of 2 years and $6,000 at the end of 5 years into an…

A: The concept of money's time value reveals that any sum currently is worth more as compared to the…

Q: Suppose you invest $18,860.00 into an account earning an interest rate of 2.426% compounded…

A: The worth of an asset today at some point in the future based on an estimated rate of growth is…

Q: 3.Assume that you deposit $9,000 at a compound interest rate of 8% for 5 years. Please calculate how…

A: Deposit amount (D) = $9000 r = 8% n = 2 years

Q: Suppose you borrowed $50,000 at a rate of 8.5% and must repay it in 5 equal installments at the end…

A: Time value of money technique explains the concept that rupee received today is worth than the rupee…

Q: how much must you repay at the end of the 3 months?

A: While charging interest on the principal amount, there are two ways to calculate it- Simple interest…

Q: Suppose you have $2,200 and plan to purchase a 10-year certificate of deposit (CD) that pays 10.9%…

A: b. $6,190.68 Explanation:We can calculate the future value of the CD using the compound interest…

Q: Mr. Andi bought a machine and agreed to a loan of Rp. 1,000,000.00 which can be paid in installments…

A: a) When the payment is made today for a loan of 1,000,000, the annuity amount to be paid can be…

Q: If you invest $40,000 at 4% interest compounded annualy, approximately how much money will be in the…

A: PV=$40,000r=0.04n=6FV=?

Q: I promise to pay you 25 annual installments of $5,000 starting five years from today. If the…

A: Present Worth: It is the present value of the annuity cashflows discounted over a period of time.…

Q: Suppose you borrowed $3,000 at a rate of 8.8% and must repay it in 4 equal installments at the end…

A: Present Value = pv = $3000Rate of Retunr = r = 8.8%Number of Payment = n = 4

Q: Suppose you buy car for $67,000 today with an interest rate of 12% over 5 years what is your monthly…

A: Time value of money is a financial concept which is used to calculate the value of money in present…

Q: You deposit $100 each month into an account earning 7% interest compounded monthly. a) How much will…

A: Given:P = $100 (monthly deposit)r=0.07 (7% annual interest rate, expressed as a decimal)n=12…

Q: 1.Assume that you deposit $946 into an account that pays 11 percent per annum. How much money will…

A: Time value of money refers to the concept that money available at the present time is worth more…

Q: You borrowed $5,000 at 7% compounded annually. Your payments are $1,219.45 at the end of each year.…

A: It can be calculated using =NPER(rate,pmt,pv,[fv],[type]) Rate The interest rate for the loan. Nper…

Q: How much would you have in your account at the end of 10 years if you deposit $2,000 into the…

A: Solution Continuous compounding is where the compounding is done continuously Mathematically Future…

Q: Assume you invest $1 000 at the end of this year, at the end of the second year, and at the end of…

A: Annual deposit for 3 years = $ 1000 Annual interest rate = 5% Future value period = 4 Years

Q: Suppose that you deposited $1000 in your savings account that earns 10% annual interest. How much…

A: Present Value in account = $1000 Annual interest rate = 10%  Time period = 3 years

Q: Suppose you borrowed $45,000 at a rate of 8.4% and must repay it in 5 equal installments at the end…

A: First we will calculate the amount of installment with the help of following formula Installment =…

Q: Suppose that you have borrowed $125,000 in the form of a 30-year loan with an annual interest rate…

A: A loan payment includes the interest as well as the principal amount of loan which has been obtained…

Q: Assume you receive $240,000 in five years and the annual interest rate is six percent. Factors for a…

A: Time value of money :— According to this concept, value of money in present day is greater than the…

Q: 2) If you deposit $3 account balance How many yea

A: The question is based on the concept of Financial Management.

Q: If you wish to accumulate $205,000 in 6 years, how much must you deposit today in an account that…

A: Future value (FV) = $205,000 Interest rate = 15% Monthly interest rate (r) = 15%/12 = 1.25% Period =…

Q: You invest $8,500 in a savings account that pays interest of 4.8% compounded monthly. To the nearest…

A: The future value function is applied when the investor wants to know how much he/she will get after…

Q: Suppose you borrowed $50,000 at a rate of 8.1% and must repay it in 5 equal installments at the end…

A: Given ,Loan amount , Annual rate , r = 8.1% = 0.081Annual rate , r = 8.1% = 0.081number of…

Q: Suppose you invest $19,640.00 into an account earning an interest rate of 2.399% compounded…

A: Future value of continuous compounding = Present Value *e^(rate*Term)

Q: b. You have a $20,000 note payable which is due in three years. How much money must you put into a…

A: Solution d: N = 1 PV (Future value of at the end of 3 years) = $20,000 Interest rate (I) = 3%

Q: Mark Welsch deposits $8,100 in an account that earns interest at an annual rate of 8%, compounded…

A: Compound = Quarterly = 4Present Value = pv = $8100Interest Rate = r = 8 / 4 = 2%Time = t = 5 * 4 =…

Q: te.4 If for the next 30 years you place $2,000 in equal year-end-deposits into an account earning 5%…

A: The objective of the question is to calculate the future value of an ordinary annuity. An ordinary…

Q: 1. A man bought a lot worth P1,000,000 if paid in cash. On the installment basis, he paid a…

A: Lot Worth (P0) = P1,000,000 Down payment (Cf0) = P200,000 Payment at year 1 (Cf1) = P300,000 Payment…

Q: A:If I lend you $ 1500, at % 8 per year, what is the simple interest to be paid at the end of two…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: 1. A man invests $4000 for 5 years at 4.2% compounded monthly. A. How much will be in the account at…

A: Amount of investment = $4000 Interest Rate =4.2% per annum Interest Rate monthly (r) = 4.2%/12 =…

Q: Suppose you have $2,300 and plan to purchase a 10-year certificate of deposit (CD) that pays 10.4%…

A: A Certificate of Deposit (CD) is a financial tool that offers a predetermined interest rate for a…

Q: 1.What is the future value of $2,000 after 3 years if the interest rate is 8%, compounded…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: . If you were to deposit $399.27 into an account today that pays 8% interest annually, with a…

A: Present Value = pv = $399.27Interest Rate = rate = 8%Payment = pmt = $100Time = nper = 5 Years

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.