不 A student takes out a loan of $1,500 at the beginning of each semester (semi-annually) for 11 semesters to pay for colege. The loan charges 6.2%, interest compounded semiannu student graduates after the 11 semesters and refinances the loan to a lower 55% rate compounded monthly with monthly payments (made at the end of each month for 120 monthly payment and the total interest paid The monthly payment is s (Round to the nearest cent as needed) The total amount of interest paid is $(Round to the nearest cent as needed) The Find the

Q: Find the effective rate of 14% compounded quarterly of a year.

A: Interest refers to the amount that is charged on the lent or borrowed amount as charges for the…

Q: Scheduled payments of $730 due today, $945 due in 3 months, and $935 due in 6 months are to be…

A: The time value of money mentions that the value of money changes with time. The worth of the money…

Q: How long will it take a $85,900 investment to grow to $123,760 if money earns 3.51% compounded…

A: The FV of an asset refers to its value at a particular future time assuming that it grows at a fixed…

Q: The interest earned on a $6000 investment was $240. What was the term in months if the interest rate…

A: Time period in years is calculated using following equation Time period = Interest…

Q: Suppose that $6,000 is invested in a 6-month CD with an APY of 1.8%. Complete parts (a) through (d)…

A: Annual Percentage Yield = APY = 1.8%Compound = n = 6 months = 2

Q: A 6 months (182 day) investment of CAD 15,500,000 yields a return of CAD 100000. What is the rate of…

A: The rate of return must be understood in connection to an investor's investment objectives and…

Q: What amount is required to invest to work between three semesters and at a rate of 16.255% per…

A: Rate is 16.255% per semester monthly capitalization Total amount is $70,866.31 To Find: Amount…

Q: forward rates are given ; 6month; 5% 12 month; 4.5% 18month; 3% 24 month; 2% are we in a state…

A: The future contract can be defined as the legal contract entered by two parties to buy or sell a…

Q: Effective rate? 12% p.a compounded quarterly

A: The effective annual rate of interest is the actual or the real rate of interest paid or received…

Q: What is the annual compounding rate per semester equivalent to 12.96% annually compounded monthly?

A: Given Information Annual rate =12.96% To find -Annual Compounding rate per semester equivalent to…

Q: Given the rate per compounding period, find r, the annual rate 0.25% per month

A: P =R / M Here P = Rate per compounding period R= Annual rate M=Times amount compounded

Q: $5,100 is invested at 6% compounded annually. what is the amount of the account at the end of 3…

A: Under Compound Interest Method, Interest is accumulated with the principle.

Q: An investment earns 10% annually. The present value of $10,000 to be received at the end c each of…

A: Solution:-When an equal amount is received each period at end of period, it is known as ordinary…

Q: Find the present and future equivalent values of the following series of payments: $1,500 at the end…

A: Compound = monthly = 12 Monthly payment = p = $1500 Time = t = 60 months Interest rate = r = 14 /…

Q: Complete the following using the financial calculator: (Round your final answer to the nearest…

A: Compounding is the method through which income from an asset, such as interest or capital gains, is…

Q: hat capital must be invested to have $

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

Q: What is the effective annual rate (EAR) of 8% per year, compounded monthly? Select one: O a. 8.66 %…

A: Nominal Interest Rate (r) is 8% Compounding Period is (m) is Monthly i.e. 12

Q: What is the equivalent annual cost in years 1 through 11 of a contract that has a first cost of…

A: Present worth (PW) of costs ($) = 79,000 + 18,000 x P/A(11%, 9) x P/F(11%, 2) = 79,000 + 18,000 x…

Q: Calculate the nominal cost of credit if the credit terms are 2/10 net 30. Assume that there are 360…

A: The objective of this question is to calculate the nominal cost of credit given the credit terms…

Q: The annual cost of a certain service is $42,000 at EOY 1 which decreases by 5.5% per year for a…

A: Annual Cost at end of year 1 = 42,000 Growth Rate = -5.5% Time Period (N) = 12 years Interest Rate =…

Q: Determine the effectivene annual yeild for 1 dollar invested for one year at 2 percent compounded…

A: Effective Annual Yield is the equivalent annual rate of return for nominal rate of return with more…

Q: 4. Determine the equal, end of period , annual worth of a process which will involve an initial…

A: Initial Outlay = 95000 Cost at end of year 1 = 11000 Annual Increase in = 1500 Time Period = 14…

Q: Given a monthly rate of 1%, the Annual Percentage Rate (APR) is ______ and the Effective Annual Rate…

A: Annual Percentage Rate (APR) - It is the rate that charged annually to the Investment. It is same…

Q: The effective rate of interest is 12% per annum.  Calculate the effective rate of interest per…

A: We have the effective annual rate. We need to find the effective rate of interest per month.

Q: Suppose that the 2 month and 5 month continuously compounded SOFR rates are 1% and 2.20%…

A: The expectations theory refers to the relationship between the short-term spot and forward rates to…

Q: Find the compound amount if P5,000 is invested at 10% compounded semi-annually for 2 years.

A: Compund Amount = PV * (1 + r/n)^ntWhere PV = Present Value  = P5,000r = rate of interest = 10%n=…

Q: The returns from an investment are 1% in Year 1, 5% in Year 2, and 3.8% in the first half of Year 3.…

A: The annualized return is a measure of the average annual gain or loss on an investment over a…

Q: nnual rate for a nominal annual rate of 12% compounded we

A: The given problem can be solved using EFFECT function in excel. EFFECT function computes effective…

Q: A debt of $52000 with interest at 9.6% compounded quarterly is to be repaid by equal payments at the…

A: The present value of debt is equal to the sum of the present value of all future monthly…

Q: What is the effective annual rate (EAR) of 8% per year, compounded monthly? Select one: O a. 8.29% O…

A: given, r=8% m = 12 ( monthly compounding)

Q: the accounts payable to 60 days? A) 28.03% OB) 1.7% OC) 12.65%

A: Discount rate=3%Discount period is 15 daysCredit period is 60 days.

Q: . J12 equivalent to ji = 10.08% i. equivalent to j4 = 12% . ja equivalent to j = 9% . per month…

A: in this we have to find equivalent rate of interest.

Q: what is the average EAR on an investment that earns 6% APR with monthly compounding for 5 years,…

A: The EAR is calculated for the compounded interest which shows the single rate that will provide same…

Q: Which of the following would indicate the BEST Average Collection Period? 30 days 20 days 25 days 15…

A: Accounts receivables means those customer accounts to whom business has made credit sales on…

Q: 5,100 invested for 9 years at 9% componded annually will accumulate to?

A: Interest is the opportunity cost calculated on the principal amount for the mentioned time period.…

Q: The operating and maintenance expense on a scientific lab are expected to increase 3% per month.…

A: Growth rate =3% Interest rate =12% Time Period = 4 Years Monthly Expenses = $1,500

Q: Assume the $15,000 Treasury bill, 4% for 13 weeks. Calculate the effective rate of interest.

A: Information Provided:Rate = 4%Period = 13 weeksPrincipal = $15,000

Q: Calculate the effective rate of 6% compounded quarterly

A: Interest rate = 6% 1 year = 4 quarter Annual  Effective rate = (1+r/n)^n -1 r = interest  n= years…

Q: The annual cost of a certain service is $36,000 at EOY 1 which decreases by 5.5% per year for a…

A: Given: Annual cost = $36,000 Annual cost Decreases by = 5.5% Years = 12 Interest rate = 5.5%

Q: What amount will be received after 18 months if P15 000 is invested at 4% compounded semi annually?…

A: Invested amount (PV) = P15000 Interest rate = 4% Semi annual interest rate (r) = 4%/2 = 2% Number of…

Q: You have entered into a 4/7 FRA at a rate of 5.9%. There are 91 days in the FRA period. After three…

A: We need to find the current value of the FRA. For that we need to know  the interest rate valid in…

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.