You took out a loan to buy a new car. The monthly interest rate on the loan is 0.6%. You have to pay $240 every month for 60 months. What is the future value of the cash flows if it's an ordinary annuity?

Q: If you put 1,000 in a savings account that yields an 7℅ annual rate of interest that is compounded…

A: Given: Present value = 1,000 Interest rate = 7% Periods = 25 weeks

Q: f you deposit OMR 20555 in your account in a bank. Suppose the bank pays 8% compound interest half…

A: Deposit amount (PV) = OMR 20,555 Annual interest rate = 8% Semi annual interest rate (r) = 8%/2 = 4%…

Q: You need to turn $11,827 dollars into $18,864 dollars in 7 years.  Assuming you make no extra…

A: Future Value = Present Value * (1+r)^nWhere,r = rate of interest per periodn = no. of compounding…

Q: suppose you put $1500 into your IRA this year. You do not make any additional contributions to the…

A: given, pv = $1500 r=10.5% n = 42 years

Q: future value of your money in 17 years.

A: Future Values: Future value is the value that will be increased or decreased after a particular…

Q: You want to buy a $183,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan…

A: The down payment is the amount of cash paid while purchasing the home. The down payment decreases…

Q: You want to buy a $175,000 home. You plan to pay 20% as a down payment, and take out a 30 year loan…

A: We have a mortgage transaction on a home. We have to find some amounts based on the mortgage.

Q: Use the formula for the value of an annuity to solve:To save for retirement, you decide to deposit…

A: The future value of the annuity is the total value of all the payments which occurred regularly at a…

Q: A couple wants to purchase a house. Suppose they invest $500 per month into an ordinary annuity. How…

A: A series of fixed payments that are paid or received at an equal time interval is term as the…

Q: A friend asks to borrow $47 from you and in return will pay you $50 in one year. If your bank is…

A: The present value of money is the discounted value of future cash flows. The future value is the…

Q: If you deposit OMR 20930 in your account in a bank. Suppose the bank pays 8% compound interest half…

A: When interest is compounded multiple times in a year: Future value = Present value *(1+r/m)n*m  r is…

Q: If you deposit OMR 8415 in your account in a bank. Suppose the bank pays 8% compound interest half…

A: Future value is the value of current asset or investment at a future date. Future value is…

Q: Imagine you have $200 today and you think to save your money in a bank for 2 years. The Bank A says…

A: Interest rate is the rate which an investor may earn on the deposits in the banks or the investment…

Q: what is the largest down payment you can make at the end of three years (immediately after the last…

A: Value at the end of saving period comprises of monthly saving and interest on those savings.…

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: Suppose that you wish to buy a new home that will cost you $452,847. You must put $80,000 down, and…

A: Negative amortization means interest on the loan is not paid due which the loan amount tends to…

Q: 1. You deposit NOK 250,000 in a savings account. The bank offers 0.25% nominal annual interest rate.…

A: Future Value(FV) is value of current amount at future point of time. FV is computed by compounding…

Q: You want to buy a house financed with a 30-year fixed-rate mortgage. The best monthly interest rate…

A: Solution:-When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: A friend asks to borrow $53.00 from you and in return will pay you $56.00 in one year. If your bank…

A: Present value refers to the discounted value of future cash flows.future value is the compounded…

Q: You invest 10.000 dolar in a bank account to buy a house at annual interest rate 14 per year,…

A: Given: Investment = 10,000 Interest rate = 14% Years = 10

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: For the next two questions, assume the interest rate is 6% compounded annually. Use the online…

A: Present value refers to the current value of the future cash flow. Present value can be determined…

Q: You took out a student loan in college and now have to pay $1,900 every year for 20 years, starting…

A: Present Value is the value of all future cash flows discounted at a given rate of interest for the…

Q: If you deposit OMR 7387 in your account in a bank. Suppose the bank pays 8% compound interest half…

A: Time value of money says that a dollar today is worth more than a diollar in future. Future value is…

Q: You decide to quit using your credit card and want to pay off the balance of $11,800 in 5 years.…

A: Given Amount of debt is $11800. Term is 5 years Interest rate is 16.05%

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: If you deposit money today in an account that pays 3.4% annual interest, how long will it take to…

A: Given information: Let us suppose the present value is $1,The interest rate is 3.4%Future value is…

Q: Suppose you invest $200 a month for 6 years into an account earning 8% compounded monthly. After 6…

A: Annuity refers to series of equalized payments that are paid or received at start or ending of…

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: Suppose that you want to avoid paying interest and decide you'll only buy the furniture when you…

A: Future value is the compounded value of all future cash flows after the specified period of time and…

Q: If you deposit OMR 20555 in your account in a bank. Suppose the bank pays 8% compound interest…

A: We need to use future value formula given below to calculate future value of deposit FV =PV(1+i)n…

Q: ut an $8,000 car loan that calls for 7 annual payments of $2,400 each.  What is the interest rate?

A: Annual payments are made for payment of loan which carry the interest and payment of principal…

Q: Suppose you put $200 into a bank account at the annual interest rate of 7%.  *Round your answer to…

A: In this we have to find the future value of given value.

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: If you deposit OMR 16830 in your account in a bank. Suppose the bank pays 8% compound interest half…

A: Amount of Deposit = OMR 16830 Interest Rate = 8%  Years =5 Interest Rate half yearly (r)=8%/2 =4%…

Q: Suppose you want to have $7,876 for a vacation in the future. What will be the estimated total you…

A: future value formula: future value = present value ×1+rateyear future value of annuity…

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.