You took out a student loan in college and now have to pay $1,900 every year for 20 years, starting one year from now. The annual interest rate on the loan is 7%.What is the present value of the 20 yearly payments?

Q: You wish to purchase a home for $500,000. You will make payments of $30,000 at the end of every…

A: A sum borrowed to meet specific personal or business funding needs is recognized as a loan/mortgage.…

Q: $5000 that you have to pay in 7 annual installments of $1100 each, the first one at the end of the…

A: The given problem relates to RATE function in excel. RATE function computes interest rate for no. of…

Q: Assume that you can get a loan from NCB for $264,500 for three years to buy an item of your…

A: Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a sum…

Q: You make two annual payments of $2,000 each (the first payment is made one year from today) into a…

A: Number of annual payments (N) = 2 Payment = 2000 Interest rate = 10%

Q: You borrow $11,000 from the bank at an interest rate of 6%, compounded annually. You are required to…

A: Compound interest is interest added to the principal amount of a loan or deposit, or interest on…

Q: suppose you want to be able to withdraw $4,800 at the end of each month for the next 20 years. How…

A: The present value of the annuity factor is used when there is an equal series of cash flows and the…

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 look to pay the loan back over 30 years paying 1% per month. You are taking out a mortgage for…

A: Installment is the amount of periodic payments a borrower makes to its lender in order to pay back…

Q: You are set to receive an annual payment of $10,900 per year for the next 15 years. Assume the…

A: First we need to use future value of ordinary annuity( payment due at end of period) formula to…

Q: You have a student loan of 40,000$ that you want to repay in 10 years. Interest rates are at 6% per…

A: Since an amount is paid annually over the loan period, it is a type of annuity. The present value of…

Q: You owe $31,000 on student loans at an interest rate of 5.85% compounded monthly. You want to pay…

A: Information provided: Loan amount = $31000 Annual rate "r"= 5.85% Number of years "n" = 7 Number of…

Q: You borrow $8000 to help pay your college expenses. You agree to repay the loan at the end of 6…

A: Present Value (PV) of loan = $8,000Annual interest rate = 9% or 0.09Quarterly interest rate (r) =…

Q: A bank is willing to lend $20,000 for a home improvement loan to be repaid monthly over 5 years…

A: From the question, we can identify the following variables:Principal amount (P): This is the amount…

Q: Suppose you owe $600 on your credit card and are paying 14 percent interest. If you pay off the debt…

A: Interest is the amount paid for the usage of the principal borrowed.

Q: You buy a house for $250,000 and pay $50,000 down.  The loan is for 25 years at 6% monthly. What is…

A: Interest: it is a finance cost that charged on borrowed value for specific period.

Q: You borrow $175,000; the annual loan payments are $10,120.27 for 30 years. What interest rate are…

A: Interest on a loan is the additional amount of money that a borrower has to pay back to the lender…

Q: You've been offered a loan of $10000, which you will have to repay in 10 equal annual payments of…

A: We take loans to buy large ticket items like a car or a house or to fund high expenses like college…

Q: You are considering taking out a loan of $10,000.00 that will be paid back over 9 years with monthly…

A: The amortization schedule outlines how each payment is allocated between interest and principal, and…

Q: You borrow $90,000; the annual loan payments are $12,852.25 for 30 years. What interest rate are you…

A: Interest :  It is the total amount payment on loan taken or fund borrowed by any person . it may be…

Q: You can invest $5,000 today in an account that earns an annual interest rate of 8%. Using the…

A: In the given case, we have provided the current investment or initial investment, annual interest…

Q: You have a student loan of 25000 with a fixed Apr of 6 % for 15 years  what is the monthly payment…

A: Using excel PMT function

Q: what is the present value of this stipen

A: Present Value:  The present value is the present sum of a series of fixed payments. The series of…

Q: If you took out a 30-year loan to buy a house for $1 million at an interest rate of 5%, how much…

A: The present value of monthly payments should equal the loan value.

Q: If you borrow $2,200 and agree to repay the loan in five equal annual payments at an interest rate…

A: Loan means lending money by one or more individuals or organizations to other individuals or…

Q: What would your investment account be worth in 23 years if you currently have $7,000 saved and plan…

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

Q: Suppose you are getting a loan from a bank to purchase a feed business. The interest rate on the…

A: The objective of the question is to calculate the annual payment for a loan of $1,000,000 at an…

Q: You Save Bank has aunique account. If you deposit $9,000 today, the bank will pay you an annual…

A: FV = A*(1+r)nwhereFV = future valueA = amount investedr = interest raten =time period

Q: How large must each annual payment be if the loan is for $50, 000? Assume that the interest rate…

A: Loan amount = $50,000Interest rate = 10%Period = 5 Years

Q: You borrow a GPM of $120,000 with annual payments and 30-year term. The interest rate is 10%. The…

A: To solve this problem, we can use the formula the present value of a growing annuity. The formula…

Q: By the end of five years, you want to save a down payment amount of $25,000 in order to purchase a…

A: The upfront payment made to purchase any personal asset on a loan is regarded as the down payment.…

Q: What will your monthly payment be if you have a 5% interest rate and a term of 20 years? How much…

A: Given:Annual interest rate = 5%Loan term = 20 yearsYearly payment (PV) = $17,000

Q: You expect to receive a one-time payment of $1,000 in 10 years and a second payment of $1,500 in 15…

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Q: You are considering taking out a loan of $17,000.00 that will be paid back over 5 years with monthly…

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A: Present value of annuity is the current worth of future annual cash flows over a period of time at a…

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A: The time value of money recognizes the idea that the value of an amount of money today differs from…

Q: monthly payments over 10 years at 5% APR interest compounded monthly, how much are your monthly…

A: Information Provided: Loan amount = $91,000 Term = 10 years Interest rate = 5% compounded monthly

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A: Monthly payments of loan can be calculated by Equated monthly instalment formula which is derived…

Q: ou will have $56,500 in student loans by the time you graduate. The interest rate is 4.5 percent. If…

A: Loans are paid by the equal monthly installments and these are paid by equal monthly payments and…

Q: What is the total amount you will have to repay for your $19,000 student loan if the interest rate…

A: 1. Calculating the Monthly Interest RateThe annual interest rate is 5%. To find the monthly interest…

Q: if you deposit $17,000 in the bank today, you will be able to withdraw $24,000 from the account in…

A: Present value is an estimate of the present value of future cash values ​​that may be received at a…

Q: You want to borrow $30,000. For the loan to you must repay $1100 every quarter (4 times per year)…

A: Borrowed amount = $30,000Quarterly payment = $1,100Number of years = 8 yearsAmount at the end of 8th…

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.