A family borrowed $60,000 to buy a house. The loan was at 6.9% and for 25 years. The monthly payments were $420.25 each. (See Example 6.) (a) How much of the first month's payment was interest, and how much was principal? interest $ principal $ (b) What was the total amount paid over the 25 years?

Q: (a) Find the monthly payment for this loan. Monthly Payment: $ (b) Find the balance of the loan…

A: Monthly payment refers to the amount which is to be paid at regular intervals for a particular…

Q: you borrowed $1,000 from a bank with 12% annual interest rate. You want to pay off the debt in 4…

A: Loan installment is that which is paid by borrower to lender for a specified period of time. This…

Q: Fifteen years ago a couple purchased a house for $180,000.00 by paying a 20% down payment and…

A: A mortgage is a covered loan that has been taken out to purchase real estate with the real estate…

Q: Payment rate = i 729.18 dollars per year Interest paid i 12395.98

A: We first need to determine the effective annual rate using the formula below: EAR = einterest rate -…

Q: 3. Ruby Red borrowed $7500 for the diner at 8.1% compounded monthly. She agreed to repay the loan in…

A: The loan amount is $7,500. The annual interest rate is 8.1%. The payments compounded monthly. The…

Q: family has a $106,621 30-year mortgage at 6.6% compounded monthly. Find the monthly payment. Also,…

A: Step 1 The interest is compounded monthly, which means it is added back to the principle each month.…

Q: semiannual payments over the next 9 years.

A: Amortization is an accounting method that lowers the book value of the loan or intangible asset…

Q: Consider a $230,000 home mortgage in which the payment per month is $945.38 for a thirty-year…

A: A Loan refers to the amount of money taken by one party named borrower from the other party named…

Q: Doreen Short was looking over the repayment schedule for a loan of $37,858 at 7% interest for 5…

A: The remaining balance after making payments for 15 months as the remaining payments will be 45 is…

Q: You borrowed $5,646 from a bank, which charges 7.8% interest per year. How much interest did you owe…

A: Principal amount (P)= $5,646 Interest rate (R)= 7.8% per year Time period (T)= 1 year

Q: How much will be owed at the end of 5 years?

A: Time value of money means the amount of received in the present period will have more value than…

Q: Dustin obtained a business loan of $220,000 at 5.21% compounded semi-annually.a. What was the size…

A: Sure, let's tackle these questions step by step.a. To find the size of the semi-annual payments to…

Q: Tom Bond borrowed $6,200 at 6-% for three years compounded annually. What is the compound amount of…

A: Compound amount = Principal(1 + Rate/100)t Interest = Compound amount - Principal

Q: Suppose you obtain a 25- year mortgage loan of 191,000$ at an annual interest rate of 7.9%. The…

A: As per the time value of money, a dollar is worth more today than the same dollar in the future.…

Q: 1. George bought a new car with a 4.1% interest rate for 5 years. The loan is for $35,000. What is…

A: The portion of interest during a particular period can be determined using CUMIPMT function in…

Q: nnual

A: In this we have to calculate future value in two steps for different rate of interest.

Q: What is the total interest paid on a loan of $5,000 at APR = 6% for 3 years

A: Compound interest is the interest on a loan or deposit calculated based on both the initial…

Q: What is the total interest paid on a loan of $5,000 at APR = 6% for 5 years.

A: Compound Interest = P(1+r/n)^nt - PWhere P = Principal = $5,000R = Rate on interest = 6%N = number…

Q: how much do you need to repay for your yearly instalment if you had borrowed $20,000 at 10% for 5…

A: Year installment will be calculated by amount of borrowings divided by Present value of an ordinary…

Q: Nicole's student loan of $26,000 at 4.62% compounded quarterly was amortized over 5 years with…

A: In this case, it is required to determine the principal balance of the loan at the end of 3 years.…

Q: tained a loan from the bank worth P 400,000.00 payable within 4 years from the time the loan was…

A: The given problem can be solved using PMT function in excel. PMT function computes installment…

Q: 6) You started a simple interest savings account with $6,000. In 41 years, the account grew to…

A: Principal = $6000 Future value = $17,700 Interest amount = $17700-$6000 = $11700 Year =41

Q: The owner of the Pink Flamingo Motel borrowed $19 500.00 at 8.11% compounded semi-annually and…

A: Borrowed Loan = $19500Quarterly Payment =$1110Interest Rate = 8.11%Term of periodic payment =…

Q: A loan of $5000 earns $750 interest in 1.5 years. Find the rate of interest.

A: Interest amount = Principal * Rate * Time duration

Q: A bank made a farmer loan of 1000 at 14% for three years compounded annually. Find the future value…

A: Loan amount = 1000 Interest rate = 14% compounded annually Period = 3 years

Q: For an auto loan of $25,600 @ 3.5 APR due in five (5) years, a) what is the total interest paid, and…

A: Loan = 25,600 APR = 3.5% N = 60 months (5 years) Interest Rate = APR/12 = 3.5%/12 per month

Q: In order to solve this question, would I use the compounded monthly formula and then subtract the…

A: We will do it in following steps:First we will find out what should be the monthly mortgage payment…

Q: The problem describes a debt to be amortized. (Round your answers to the nearest cent.) A man buys…

A: Loans are to be paid by the periodic payments that carry the payment for the principal amount and…

Q: The problem describes a debt to be amortized. (Round your answers to the nearest cent.) A man buys…

A: Using excel PMT function to calculate size of each payment.

Q: John received a loan of $40,500, 6 years ago. The interest rate charged on the loan was 4.68%…

A: Loan Calculations for JohnWe will solve this step-by-step, calculating the accumulated value at each…

Q: The amount needed to pay off (Round to the nearest cent as needed.) this loan after 2 years is

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

Q: A family has an $80,000, 20-year loan at 8% compounded monthly. (a) if the monthly payment is…

A: A loan is an amount of borrowing that an individual or a corporation has taken from a bank or a…

Q: A family buys a house worth $326,000. They pay a $75,000 deposit and take a mortgage for the balance…

A: Amortized loan: In this type of loan, the borrower makes periodic payments of loan and the payments…

Q: What will the monthly payments be? (ii) Find the total amount of interest paid when the loan is…

A: Loan: It is the amount due by the borrower to the lender for taking a loan. The borrower makes…

Q: On a $529, 000 home, on a 30- year fixed mortgage, with an interest rate of 5.29, find: a. The down…

A: Home cost = $529,000Number of years = 30 yearsInterest rate = 5.29%

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.