You are borrowing money to buy a car. If you can make payments of $280 per month starting one month from now at an interest rate of 9%, how much will you be able to borrow for the car today if you finance the amount over 5 years?

Q: You're thinking about borrowing a $2000 personal loan. The interest rate on the loan is 10% with…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: Suppose you finance a $10000 car over 8 years at car an interest rate of 14% per month. How much is…

A: Loan amount (PV) = $ 10000 Period = 8 Years Number of monthly payments (n) = 8*12 = 96 Interest rate…

Q: You can afford a $500.00 per month car payment. You can get a loan at 8% interest for 4 years. A.…

A: Loan: When money is lent to another party in return for regular repayment of the loan principal…

Q: You have $4,500 on a credit card that charges a 15% interest rate. If you want to pay off the card…

A: Installment is the amount of periodic payment a borrower has to make to its lender in order to pay…

Q: Suppose you wish to start up your coffee shop.  You need to borrow $50,000 today.  You intend to pay…

A: Using PMT function of the excel to calculate monthly withdrawals

Q: You want to borrow $25,000 to buy a new car. Your annual interest rate is 6.2% over 4 years with…

A: Given: Loan borrowed = $25,000 Interest rate = 6.2% years = 4

Q: You have already saved $6975 to buy a used car. You invest this money in a certificate of deposit…

A: Future Value refers to the value of the current asset at any specified future date for a given…

Q: You are deciding to buy a car to commute to work given the comparatively low interest of 6% per…

A: A loan is a debt arrangement that provides financial assistance to a person to full fill a specific…

Q: you are saving money to buy a car. if you save $290 per month starting one month from now at an…

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

Q: In order to be able to buy the new machine, you take a loan of 2 million from the bank, which you…

A: Amortized loan: An amortized loan is a case of the present value of an ordinary annuity.The PV of an…

Q: You want to buy a $18,000 car. You can make a 10% down payment, and will finance the balance with a…

A: Monthly installment is that amount which is paid every month it's includes the interest and…

Q: You want to buy a $255,000 home. You plan to pay 5% as a down payment, and take out a 30 year loan…

A: Amount of home = $255,000 Down payment = 5%  The time duration of the loan = 30 years

Q: you want to buy a car for $8300 with $360 monthly payments for 4 years, what is the annual interest…

A: Interest rate is the rate which the customer would have to pay on the periodic payment of the…

Q: You are saving to buy a new car in two years.  You currently have $5000 in an account that pays 4%…

A: We need to use present value formula below to calculate amount required today in account.PV…

Q: over 4 years with monthly payments. Calculate your monthly payment.

A: Information Provided: Amount borrowed = $15,000 Interest rate = 3.3% Term = 4 years or 48 months

Q: You would like to purchase a new car in the side that you can afford monthly payments of $400 how…

A: The monthly payment is :The aim is to find the initial loan amount

Q: You've been offered a loan of $20000, which you will have to repay in 5 equal annual payments of…

A: Present Value = pv = $20,000Number of Payment = n = 5Payment = p = $6000

Q: You plan to fina

A: future annuity – suppose an equal sum of money is invested in the bank on a recurring basis what…

Q: You are considering the purchase of a new car. You can afford a payment of $400 per month. You plan…

A: In the given problem we are considering to buy a new car and we want to know how much money we can…

Q: You took out a loan to buy a new car. The monthly interest rate on the loan is 1%. You have to pay…

A: A= $220 R= 1% N= 60

Q: You are saving money to buy a car. If you save $330 per month starting one month from now at an…

A: Calculation of Future value:The value after 4 years is $18,981.83.Excel spreadsheet:

Q: Solve the following problems. Round your results to the nearest cent as needed. You need a loan to…

A: P = $24,200 (loan amount),(monthly interest rate),n=6×12 (number of months in 6 years).

Q: You have two monthly car payments of $400 each left on your car. If the interest rate is 0.75…

A: Monthly Payment (PMT) = $400Monthly interest rate (r) = 0.75% or 0.0075Number of periods (n) = 2…

Q: You want to buy a new car. You can afford payments of $250 per month and can borrow the money at an…

A: The term mortgage refers to a type of loan that is for the long term, and it usually has the asset…

Q: You borrow $18826 to buy a car. You will have to repay this loan by making equal monthly payments…

A: Borrowed amount is $18826 Time period is 5 years APR is 12% To Find: Monthly payment

Q: After graduating from college and securing your first job in your field of study, you need to…

A: Car price = $92,500Down payment = 2%The amount of loan is

Q: A man plans to take a vacation in 5 years. He wants to buy a certificate of deposit for $1300 that…

A: To calculate the simple interest rate we will use the below formula   Interest rate = [(A-P)/P]/T…

Q: You want to buy a $23,000 car. You can make a 10% down payment, and will finance the balance with a…

A: A loan refers to a contract between a borrower and a lender where a sum is exchanged on the promise…

Q: ou take out a 6-year amortized loan to buy a new car. After making monthly payments of $242.30 for 4…

A: Amortized loan A loan with periodic payments that are applicable to the principal as well as on the…

Q: You want to buy a car for $25000 that has to be paid in 5 years. If the car dealer agrees to finance…

A: Working note:

Q: You buy a car with a down payment of $1000 and $200 per month for 3 years. a) If the interest rate…

A: Loan amount is the present value of monthly payment based on time value of money and intrest rate of…

Q: You want to buy a car. The loan amount will be $25,000. The company is offering a 4% interest rate…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: You have determined that you can afford to pay $800 per month toward a new Italian sports car. You…

A: Present value is the sum of money that must be invested in order to achieve a specific future goal.…

Q: You took out a loan to buy a new car. The monthly interest rate on the loan is 1%. You have to pay…

A: An Annuity Due is a stream of regular periodic payments made at a beginning of period for a…

Q: You are saving to buy a new car in two years.  You currently have $5000 in an account that pays 4%…

A: The FV of an investment refers to the combined worth of the cash flows of the investment at a…

Q: Use Excel to answer this question: You want to borrow money from your bank to purchase a car. The…

A: Amount you can borrow = Present value of the maximum monthly paymentsNOTE :here the monthly payment…

Q: You are buying your first car for $20,000 and are paying $2,000 as a down payment. You have…

A: Given information: Purchase amount = $20,000 Down payment = $2,000 Loan Amount = $20,000 - $2,000 =…

Q: You decide that you can spend 600 as a monthly payment for a new car. Your bank offers car loans at…

A: The amount that can be borrowed should equal the present value of future payments. This is based on…

Q: You would like to save for a car. You would like to have $20,000 saved in 5 years. You decide to…

A: Recurring deposit is an annuity where same amount is deposited with an institution over cardinal…

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.