a. Kim pays ₱2,000 every two months to settle his obligation for two years at 8% compounded bimonthly. Find the present value of the loan. b. Ian bought a second-hand car worth ₱320,000. She gave a ₱50,000 down payment and agreed to amortize the balance by equal payments at the end of each month for 5 years. If money is worth 8% compounded monthly, how much is the monthly payment?

Q: A boy borrows 25000 from father. His father lends him money, on the condition that he would be…

A: A loan is a financial arrangement in which a lender provides funds to a borrower, who agrees to…

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Q: uestions below

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A: The Effective Interest Rate is the actual interest rate earned or paid on a financial instrument…

Q: John borrows money from a bank. Interest rate is 9.5%pa compounded half yearly. He has

A: Interest rate=9.5%Compounding semi annually.

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Q: John already has $55,600 today in his savings account earning 5.5% compounded semiannually. The…

A: Here,

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Q: Frank had originally promised to pay Jane $1,500 3 months ago, $1,000 today and $1,000 6 months from…

A: Compounding and discounting are the ways to consider the money’s time value at given rate.…

Q: kenzo decided to buy a brand new car worth php 1, 200, 000 and plan to amortize the loan in monthly…

A: Present Value of Ordinary Annuity refers to the concept which gives out the discounted or today's…

Q: Joyce pays P 2,000 every two months to settle his obligations for two years at 8% compounded…

A: Bimonthly payment (B) = P 2000 r = 8% compounded bimonthly = 8%/6 bimonthly = 1.3333% n = 2 years =…

Q: must she

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Q: Riley takes out a loan L of 3000 dollars to buy a car at an effective annual rate of interest of 6%.…

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Q: Elizabeth pays $294.50 for a car lease at the beginning of every month for 1 years and 8 months at…

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Q: 3. Rasid buys a house for RM185,000. He pays a 10% down payment and the balance is borrowed from a…

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Q: Ms. C took a loan of $150,000 at a rate of 7 percent. She can pay equal installments of $25,000 at…

A: PV(loan amount) = 150,000I/Y (interest rate) = 7%PMT (periodic payment) = 25,000

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Q: Fritz Benjamin buys a car costing $14200. He agrees to make payments at the end of each monthly…

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Q: Andy borrowed P9000 from Randy today and P12000 two years after and made a partial payment of P7000…

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Q: Mr Teo wants to buy a house. His annual income is $48,000. The bank is willing to lend an amount…

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A: Interest earned refers to the product of amount invested/borrowed, time period and interest rate.

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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.