A person owes $ 1,000.00 due in 1 year at 14% interest. You want to settle this obligation through two payments of the same amount to be made in 3 and 9 months respectively. What will be the amount of these payments, if both parties agree to use an interest rate of 14% and a focal date of one year?

Q: For how long will Markus have to make payments of $179 at the end of every year to repay a loan of…

A: Loan amount=$2130Annual payment=$179Interest rate=7%Compounding quarterly.

Q: A person contracts two obligations of $ 10,000.00 and $ 15,000.00 that will be paid, the first…

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Q: Andrew Codilla has a present obligation of $10,500 that is to be paidinequal uniform amounts, each…

A: The present value of an annuity refers to the present value of all the future payments of a series…

Q: A present obligation amounting to ₱150,000 is to be repaid for 4 years at a rate of 12% per year.…

A: The answer for the opinion based question and relevant explanation are presented hereunder : Present…

Q: A contract requires payments of $4954.00 today, $4004.00 in 3 years, and S 2583.00 in 5 years. When…

A: TVM is the concept that considers money's interest-earning capacity, which makes money earned…

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

Q: A debtor borrows P7,900 and agrees to pay P9,359 for his debt 3 years & 4 months from now. At what…

A: Given, Future value = FV = P9,359 Present value = PV = P7,900 Number of months = t = 3years 4 months…

Q: Ayola has bought from YoBank a 3 versus 6 Forward Rate Agreement which is based on a notional…

A: Forward rate agreement: It refers to an interest rate hedging strategy where parties agree to settle…

Q: ou are required to prepare Andre’s amortisation schedule for the first 4 months

A: The money which is given to an entity from another entity for the purpose of repayment at a later…

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Q: A contract requires end-of-month payments of $240 for another 9 1/4 years. What would an investor…

A: > The amount willing to pay for the investment shall be computed by applying the present  value…

Q: Reuben has the option of receiving a loan of $13,625 for 8 years at an interest rate of either 4.73%…

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A: For purpose of calculation and evaluation of both the options, we need to compare the vash flows on…

Q: You have an outstanding debt of $8,000, with 9% simple interest. If you make a partial payment of…

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Q: How much interest would you be paying in the 75th month?

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A: As you have asked a multiple subpart question, we will answer the first three subparts for you. To…

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A: Introduction: Interest Rate: Any extra amount which is paid against the money borrowed is referred…

Q: is 4% per annum compounded semi-annually? State your answer in years and months (from 0 to 11 He…

A: Loan amount=$3340Annual payment=$116Interest rate=4%Compounding semi annual.

Q: A floating rate mortgage loan is made for $185,000 for a 30-year period at an initial rate of 12…

A: The concept of the time value of money acknowledges that the value of money today differs from its…

Q: alfred desires 9000 as the proceeds of a 90 day loan from b who charges 5% interest in advance. what…

A: Future value is the value of the current assets or some amount that is invested today and the amount…

Q: Solve the problem below on Amortization. (Round amounts to the nearest centavo) Mr. M. Roque obtains…

A: Loan amount (PV) = P 60,000 Interest rate = 8% Quarterly interest rate (r) = 8%/4 = 2% Period = 3…

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.