a 5-year $10,000 loan requiring annual payments at a fixed rate of 9% is amortized into five-year annuity payments. How much is the annual payment?  $2789 $1908 $3105 $3245 $2233 $2571 $4100 $2860

Q: An annuity that pays $1100 at the end of each month for 23 years sells for $120,000. What was the…

A:

Q: Your bank pays 8% interest, compounded semiannually. Use Table 12-1 to find the future value (in $)…

A: A sum of money is worth more now than it will be at a later time due to its potential for profits in…

Q: The present value of an annuity using an effective annual discount rate of 12% is $40,043.69. This…

A: An annuity is a payment series where a periodic sum is paid in exchange for a lump sum payment. It…

Q: A 20 year loan of $100, 000 at i = 6% is paid off by paying 125% of each year’s interest at the end…

A: Term of Loan20yearsLoan amount100000Interest rate6%

Q: A twenty-year loan of $15,000 is being repaid with payments of X every other year beginning at the…

A: Loans are paid by equal payments that carry the payment of interest and loan.

Q: A 20-year loan of 20, 000 may be repaid under the following two methods: i. amortization method with…

A: given that: Loan Amount=20000 Loan period= 20 years The excel formula is:

Q: What is the present value of a perpetuity with the annual payment of $4,000 at the annual interest…

A: The present value is used to estimate the current value of a future payment or cash flow. It entails…

Q: What is the present value of receiving $1,000 at the end of each year for 6 years, assuming 7%…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: A $100,000 mortgage loan at 6.3% compounded semi-annually has a 25-year amortization period.…

A: A mortgage is a covered loan borrowed to purchase a property. The property itself acts as collateral…

Q: A growing annuity pays $1,000 at the end of the second year (t=2). The payment grows 3% per year…

A: Payment after second year = $1000 Number of payments = 5 Growth rate = 3% Discount rate = 8%

Q: $4,000 every year 20 4

A: Present value of annuity is equivalent value today of the future payments to be received in the…

Q: What’s the interest rate of a 5-year, annual $4,800 annuity with present value of $20,000?

A: Given; Present value of annual payments : $20,000 Time period (r): 5 years Annuity: $4,800

Q: 2. $6500 was borrowed at an interest rate of 12% compounded semi-annually. If the loan is to be paid…

A: Given: Rate of interest(r) =12%p.aRate semi-annually=6%Time (t) =5 yearsTotal No. of…

Q: What is present value of annuity A

A: First payment = $1000Period = 20 yearsIncrement = 3%Interest rate = 5%

Q: What is the present value of a $90,000 annual annuity for 10 years with an additional $1,000,000…

A: The present value of investment is the sum of present value of annuity and the present value of…

Q: a 5-year $10,000 loan requiring monthly payments at a fixed rate of 9% is amortized into five-year…

A:

Q: A single payment of $15,000 @ 5% for 8 years. Please identify which table you used.

A: Present Value(PV) is value of a future amount at current point of time. It is done by discounting…

Q: What is the present value of a $1,340 per year annuity for five years at an interest rate of 12…

A: The interest rate represents the percentage of the principal amount either charged for borrowing or…

Q: Select the correct answer and explain A loan of $ 45,000 is obtained at 17.5% per annum, to be paid…

A: Total Loan amount is $45,000 Rate of interest is 17.5% Time period is 2.5 years or 5 semesmter…

Q: What is the present value of an annuity that pays $58 per year for 13 years and an additional $1,000…

A: PMT = 58 Period = 13 years  Nominal rate of interest = 7.23% Additional amount = 1000

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.