A man owes Php 12,000 today and agrees to discharge the debt by equal payments at the beginning of each 3 months for 8 years, where these payments include all interest at 8% payable quarterly. Find the quarterly payment.

Q: James borrows $280 000 and repays the loan in equal fortnightly repayments of $1250 over 20 years.…

A: The time value of money is a concept used to compute and analyze the present worth of the future…

Q: You invest $2,300 in a 4-year certificate of deposit (CD) that pays 3.2% interest, compounded…

A: In this question we need to compute the future value at the end of year 4.

Q: Akbar has borrowed $48,000 today and agreed to repay it in 5 years with monthly payments at the…

A: Given information: Amount borrowed is $48,000 Interest rate is 2.60% Number of years is 5 years

Q: ay off a debt that he took out today, Roger will have to make a payment of $3,500 in 15 months and…

A: The loan amount is the present value of payments made for the loan based on time and interest rate…

Q: Potter wishes to deposit a sum that at 12% interest, compounded semiannually, will permit 2…

A: We need to use present value formula to calculate required deposit now. The equation is PV =FV(1+i)n…

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.