3. Need help with finance homework. Assume a discount rate of 6.75%. You are planning to receive payments annually (at end of year) for the next 6 years. The first payment's amount will be $12,000. Each subsequent payment will increase by 2.2%. What is the present value of these payments you are planning to receive?

Q: You owe $19,000 on student loans at an interest rate of 4.6% compounded monthly. You want to pay off…

A: The amount of loan "PV" is $19,000 The interest rate is 4.6% Compounded monthly The time period is 6…

Q: Your parents say they will loan you $15,000 today for college. They would like to be repaid $21,000…

A: Present value = pv = $15,000 Future value = fv = $21,000 Time = t = 10 years

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A: Present value of annuity = 75{1-(1+0.072)^-120}/0.072

Q: f you were to put $1,000 in the bank each year for the next 10 years at 6% interest, which table…

A: Future value of $ 1: This table is used to calculate the future value of a single amount invested…

Q: How much must you put away at the end of each year

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Q: In an attempt to have funds for a down payment in five years, you plan to save $7175 each year for…

A: Future value = PV * (1+I)N -1 / I.PV= Present value.I= Interest rate N= Number of periods.Cal

Q: You plan to invest $1,200 at the end of year 1, $2,000 at the end of year 2, and $3,700 at the end…

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Q: Calculating interest earned and future value of savings account. If you put $6,00 in a savings…

A: The value that is estimated for the future on the basis of current value and rate of interest is…

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…

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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

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A: The concept of time value of money states that the money received today is worth more than that the…

Q: 3. As part of your future retirement planning, you purchase an annuity that pays 3.5 % Search…

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A: Future value refers to the value of the current asset on some future date affected due to inflation…

Q: You want to buy a house within 3 years, and you are currently saving for the down payment. You plan…

A: Future value of growing annuity The future value of a growing annuity is the value of money received…

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: How much money would you need at the present to pay for 4 years of college tuition if the first year…

A: Cost for first year = $40,000 Cost for second year = $40,000 + $5,000 = $45,000 Cost for third year…

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Q: what is the value today of Social Security's promise?

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

Q: You have a balance of $8,000 on your credit card.  The interest rate is 19% per year.  You want to…

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

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: payments with the first payment being made at the end of this year. If the payments are to grow by…

A: This is present value of growing of annuity problem can be solved using formula.Loan…

Q: At the end of each month for the next ten years you will receive cash flows of $50.  If the…

A: Annuity refers to the contract between an insurer and the insurance company in which a fixed…

Q: PART C.) In planning for your retirement, you expect to save $5,000 in year 1, $6,000 in year 2, and…

A: A concept that implies the future worth of the money is lower than its current value due to several…

Q: Taft Technologies has the following relationships: Annual sales 1,200,000.00 Current liabilities…

A: A balance sheet is a statement which provides financial data related to the assets, liabilities and…

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: Suppose that you borrow $17,000 for five years at 6% toward the purchase of a car. Find the monthly…

A: Answer :Principal = $17000 Rate = 6% = 6/1200 = 0.005 Time = 5 * 12 = 60 months Payment per month =…

Q: What is the maximum that you would be willing to loan your brother for a $100 IOU if he promises to…

A: Since  Future value = Present value ×(1+Periodic Interest rate)^n Where, N= Number of periods = 1…

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Q: You want to buy a car, and a local bank will lend you $20,000. The loan would be fully amortized…

A: A loan is a method through which an individual can borrow money from a financial institution for…

Q: you borrowed $400 from a friend and promised to repay the loan by making three annual payments at…

A: Loan amount is equal to the present value of payment done based on time value of money..

Q: You are going to receive a set payment at the end of each year for the next 12 years. If the proper…

A: The present value method is an important method of the time value of money. The present value is the…

Q: How much will you have in accumulated savings 20 years from now if you deposit $2,000 at the end of…

A: Period = 20 Years Year end deposit = $ 2000 Growth rate = 2% Interest rate = 5%

Q: You lend a friend $35, 000, which your friend will repay in 12 equal annual end - of - year payments…

A:

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

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

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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…

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.