A $30,000 loan with an interest rate of 9% compounded monthly was repaid, after a period of deferral, by monthly payments of $450 for 10 years. What was the time interval between the date of the loan and the first payment? (round up to the nearest month; i.e. 14.34 will round to 15)

A $30,000 loan with an interest rate of 9% compounded monthly was repaid, after a period of deferral, by monthly payments of $450 for 10 years. What was the time interval between the date of the loan and the first payment? (round up to the nearest month; i.e. 14.34 will round to 15)

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

See similar textbooks

Related questions

Q: A loan is to be repaid over 30 years, with month-end repayments of 8,000. If the interes rate is…

A: Loan Amount = Monthly payments * [ 1- [1/(1+r)^n ] / r where r is the monthly rate = 3/12 = 0.25 n…

Q: Find the refund fraction on a 30-month loan with interest of $2,802 if the loan is paid in full with…

A: Refund fraction is the amount of interest refund a lender makes to the borrower because of early…

Q: A loan is taken out at j12 = 18% and is paid back with monthly payments of $279.00, plus a smaller…

A: Annual interest rate j12 = 18% (i.e compounding monthly)henceMonthly interest rate = 18% / 12 =…

Q: A loan of R5000 is to be amortised over thirteen years by regular equal quarterly payments starting…

A: Amortization is the process of gradually paying off a debt or loan through regular, scheduled…

Q: A $4,500 loan at 8.4% compounded monthly was settled by a single payment of $5,500 including accrued…

A: Formula: A = P x (1 + r)n A = ending balanceP = starting balancer = interest raten = the number of…

Q: Simple interest of P1,235 is owed on a loan of P9,500 after four years and four months. What is the…

A: Simple interest amount (I) = P1,235 Loan amount (P) = P9,500 Period (t) = 4 Years and 4 months =…

Q: You take one-year installment loan of $1000 at an interest rate of 12% per year (1% per month) to be…

A: Loan amount (L) = $1000 r = 1% n = 12

Q: A loan is repaid by making payments of $2000 at the end of every six months for 12 years. If…

A: Semiannual payment (c) = $2000 Semiannual period (n) = 24 (i.e. 12 years * 2) Nominal interest rate…

Q: A loan of $12,000 is repaid by payments of at the end of every three months Interest is 9% $571

Q: A loan of $11,300 is to be amortized with quarterly payments over 6 years. If the interest on the…

A: Time value of money is the concept where the value of money today is higher than the value of money…

Q: n is to be repaid over 30 years, with month-end repayments of 5,000. If the interest rate is 4.1%…

A: Loans are to be paid by equal fixed monthly payments and these monthly payments carry payment for…

Q: A loan of $5,000 can be repaid by payments of $117.38 at the end of each month for n years (that is,…

A: We have; Amount of loan is $5000 Monthly payment for loan is $117.38 Time period is 12n Monthly…

Q: A loan of $15,000 requires monthly payments of $477 over a 36-month period of time. These payments…

A: APR is the annual percentage rate. It is the interest rate charged from the borrower of the loan and…

Q: Find the length of the loan in months, if $800 is borrowed with an annual simple interest rate of…

A: Time value of money concept says that a sum of amount invested today will have more value in future…

Q: A loan, amortized over 15 years, is repaid by making payments of $1,900 at the end of every month.…

A: Principal payment refers to the amount of loan that is paid back by the borrower. The loan amount is…

Q: A loan of $6,000 is repaid by payments of $544 at the end of every three months. Interest is 7%…

A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

Q: Find the annual simple interest rate of a loan, where $800 is borrowed and where $904 is repaid at…

A: Interest charged on the principal amount at a fixed rate for a fixed period of time is known as…

Q: Create a loan repayment schedule for a loan of $30295 and payments of $8482 made annually. Assume a…

A: Given, Loan amount: $30,295 Annual payment: $8,482 Interest rate: 6.13% per year (compounded…

Q: A loan is repaid with payments of $2560 made at the end of each month for 13 years. If interest on…

A: Amortization of a loan refers to the process of spreading out the repayment of a loan over a set…

Q: A loan requires that payments of $580 be made at the end of each month for a total of 180…

A: It is a case of calculation of the present value of a monthly annuity. The monthly annuity is the…

Q: compounded quarterly, what was the loan principal?

A: Information Provided: Years = 20 Monthly payment = $1700 Interest rate = 5.70% compounded quarterly…

Q: A loan is repaid by making payments of $3456 at the end of every 3 months for 10 years. If interest…

A: We take loans to buy expensive things or large ticket items like a house or a car. These items…

Q: A person borrows $15,000 at an interest rate of 6%, compounded monthly, to be paid with payments of…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: Find the length of the loan in months, if $500 is borrowed with an annual simple interest rate of 3%…

A: Compound Interest: Compound interest is interest computed on a loan or deposit depending on both the…

Q: Find the refund fraction on a 18-month loàn with interest of $2,852 if the loan is paid in The…

A: The refund fraction is the fraction or percentage that has to refund of the amount of loan.

Q: A fully secured loan of P30,000 was to be amortized by 10 equal semi-annual payments, the first…

A: The time value of money becomes an important factor for capital budgeting decisions. It is an idea…

Q: A loan of $1500 is repaid with a check for $1575. If the annual simple interest rate was 15%, what…

A: The number of months can be calculated with the help of simple interest equation.

Q: Suppose you take on a loan that is subject to an annual interest rate of 12%, with the interest rate…

A: present value=future value1+rate of interestfrequency of compoundingyear×frequency

Q: A car loan of $37,412.98 is to be repaid with end-of-month payments of $725.06. If interest is…

A: Loan amount (PV) = $37,412.98 Monthly payment (P) = $725.06 Interest rate = 5% Monthly interest rate…

Q: A 15-year loan requires month-end payments of $587.33 including interest at 8.4% compounded monthly.…

Q: SportZ has negotiated a loan of $25 000 with interest at 7.6% per annum, to be paid as month-end…

A: The objective of the question is to construct a loan amortization schedule and use it to answer…

Concept explainers

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.

Question

A $30,000 loan with an interest rate of 9% compounded monthly was repaid, after a
period of deferral, by monthly payments of $450 for 10 years. What was the time
interval between the date of the loan and the first payment? (round up to the nearest
month; i.e. 14.34 will round to 15)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Calculation of Time period between date of loan and first payment:

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
A loan of R5000 is to be amortised over thirteen years by regular equal quarterly payments starting three months after the loan is granted. Interest on the loan is charged at 12,8% p.a compounded quarterly. Immediately after the fourth payment, the interest rate changes to 13% p.a. compounded quarterly. If the payments remain unchanged from the fifth payment onwards, then the new final amount ( to the nearest cent) needed to amortise the loan in the original time period, is equal to R
A loan is to be amortized by equal payments of P500.00 each at the end of every six months for ten years. Interest is based on 7% compounded semiannually. What is the outstanding debt after eight years? Select one: a. P1,657.88 O b. No answer c. P2,034.29 d. P1,836.54 e. P1,976.87
A loan of $5,000 can be repaid by payments of $117.38 at the end of each month for n years (that is, 12n payments), starting one month after the loan is made. At the same rate of interest, 12n monthly payments of $113.40 each accumulate to $10,000 one month after the final payment. Find the equivalent effective annual rate of interest.
ou were paying your fully amortising loan at 8.2% per annum for 12 years. The current monthly payment is $1,492 per month. What is the remaining loan balance at the end of year 2? Please rounded your answer to two decimal points (e.g. 8000.158 is rounded to 8000.16)
A$35,000loan bearing interest at5%compounded quarterly was repaid, after a period of deferral, by quarterly payments of$1573.83over 12 years. What was the time interval between the date of the loan and the first payment?
Directions: Solve the following problems. A loan of P40,000is to be amortized by equal payments at the end of each for 18 months. quarter I interest is 10% compounded quarterly, find the periodic payment and construct an amortization schedule.
A fully secured loan of P30,000 was to be amortized by 10 equal semi-annual payments, the first payment to be made 6 months after the loan finalization. After the payment was made, the debtor was in a position to settle the entire debt balance by a single payment on that date. If the interest on the loan is 12% compounded semi-annually, what would be the amount of this single payment?
The interest rate on a $59,000 loan is 8.9% compounded semiannually. Quarterly payments will pay off the loan in twelve years. (Do not round Intermedlate celculatlons and round your final answers to 2 declmal places.) a. Calculate the interest component of Payment 10. Interest $. 1187.03 b. Calculate the principal component of Payment 40. Principal $ 1660.07 c. Calculate the total interest in Payments 29 to 40 inclusive. Total interest $ 6734.03 d. Calculate the reduction of principal in Year 5. Principal reduction $ 4095.68 Mc Graw Hill correct W bo
A loan is repaid with payments of $2560 made at the end of each month for 13 years. If interest on the loan is 14.5%, compounded semi-annually, what is the initial value of the loan? Enter to the nearest cent (two decimals). Do not use $ signs or commas. Answer: NEXT PAGE
A loan is to be amortized by equal payments of P5,000 at the end of each six months for 10 years. If the interest is based on 7% compounded semiannually, find: a. the present value of the loan b. The outstanding principal just after the 8 th payment; and c. The remaining liability after 8 years.