Are the two options shown below equivalent in paying off the loan?

Q: You receive a 10-year subsidized student loan of $22,000 at an annual interest rate of 4.3%. What…

A: Using excel PMT function to calculate monthly payment.

Q: just landed a great part-time internship with a local firm that will pay you a stipend of $24,000…

A: Present value is the equivalent value of future money today based on the time value of…

Q: f. To help you reach your $1,000 goal, your father offers to give you $400 in one year. You will get…

A: The future value of an amount is the value of the investment after certain time period when invested…

Q: Suppose you are starting a PhD program. The university has agreed to waive your tuition, cover all…

A: The objective of this question is to calculate the future value of a series of monthly deposits of…

Q: When you retire, you plan to draw $50,000 per year from your retirement accounts, which will be…

A: Annuity is the no. of payments which are equal in size and made in equal interval of time. Person…

Q: You are to receive $ 400,000 exactly 5 years from now. You do not want to wait for the money and…

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: Stephen has just purchased a home for $162,000. A mortgage company has approved his loan application…

A: Buying a house is a once in a life step. Most of the people buying a house do not have enough cash…

Q: Maria and John decide to shop for furnishings for the new house.  They choose items that amount to…

A: Computation:

Q: Suppose that the Carlsons have decided that they can afford a maximum of $3000/month for a monthly…

A: Monthly Payment = $3,000 Time period = 30 Years Interest rate of 5/1 ARM = 4.6%

Q: Find the APR (rounded to the nearest tenth of a percent) for the loan described below. Purchase a…

A: APR: APR stands for annual percentage rate. which means the annual percentage rate on purchases.…

Q: After starting your full - time job out of college, you decide to buy a new car for $85,000. Create…

A: Car cost = $85,000Number of payments = 84Discount rate = 6.5%To find: Amount owed after the 75th…

Q: Maria and John decide to shop for furnishings for the new house.  They choose items that amount to…

A: Formula for simple interest  Future value =Principal + interest rate x number of years

Q: Jeffrey Wei received a 6 year non-subsidized student loan of $30,000 at an annual interest rate of…

A: Present Value = $30,000 Interest Rate = 5.9% Time Period= 6 Years Loan Start after 4 Years

Q: You finance your college education with a student loan. Every month, you borrow $1,000 to pay for…

A: Future value of annuity is computed as follows:-FV = A*whereFV= future value of annuityA= periodic…

Q: Suppose you have the following three student loans: $11,000 with an APR of 8.5% for 12 years,…

A: Here,First LoanSecond LoanThird LoanLoan Amount $  11,000.00 $  17,000.00 $…

Q: Annette is considering two offers on her house in Rutland. The first offer is $395013.52 which…

A: Person An accepts the offer that has higher present value. Hence, present value of both offers…

Q: How much will you have saved at the end of 6 years? Find the interest.

A: A stream of equal cash flows paid or received periodically is termed as annuity. Annuity is either…

Q: You are saving money for a down payment on a new house. You intend to place $5,000 at the end of…

A: Future value:The future value is a financial concept that calculates or shows the value of money in…

Q: complete your last year in business school and then go through law school, you will need $5,000 per…

A: Present value is the equivalent value of money required today based on the time value of money and…

Q: finish your engineering degree with $17,350 in student loans.  The interest rate on your loans is…

A: Loans are paid the monthly payments and these monthly payments are equal and fixed and these carry…

Q: A couple wants to buy a $32.000 car and can bonow the money lor the puechase at 8%, payingtofin3 4,…

A: If car is financed over 3years, the payment is P(3)=$1002.77 It's meaning is that, the couple has to…

Q: 4. Jones would like to borrow S$4000 for a project. He plans to pay back the loan plus the interest…

A: In order to find the best alternative, we must calculate the value of the effective annual rate in…

Q: Your parents are giving you $100 a month for four years while you are in college. At a 6% annual…

A: The objective of this question is to calculate the present value of a series of future payments,…

Q: A student needs to borrow $7,000 to pay for college. She can get a loan at an APR of 10% to paid off…

A: We need to calculate total payment by using the loan amortization formula. Fist we need to calculate…

Q: You decide to do some remodeling in the kitchen. Your parents agree to lend you the money, but you…

A: Simple interest is calculated by multiplying borrowed amount , interest rate and time.   Simple…

Q: Jorge is buying a new car for $24,750. Compare the two loan offers by finding the monthly payments…

A: Purchase Price of Car = 24750 Two loan options evaluated below

Q: You receive a 10-year subsidized student loan of $19,000 at an annual interest rate of 6.8%. What…

A: Using excel PMT function to calculate the monthly payment

Q: What is the total amount you will have to repay for your $19,000 student loan if the interest rate…

A: 1. Calculating the Monthly Interest RateThe annual interest rate is 5%. To find the monthly interest…

Q: You decide to do some remodeling in the kitchen. Your parents agree to lend you the money, but you…

A: Simple interest per month is calculated at: = Principal * rate of interest * 1/12

Q: Mr. and Mrs. Fuller are buying a new house for $350,000. Compare the two loan offers by finding the…

A: Option 1: Here down payment = 10% of 350,000 = 35,000 Hence amount financed = 350,000 - 35,000 =…

Q: car for $18,500. Compare the two loan offers by finding the monthly payments for each and…

A: Loans are to be paid equal monthly payment that carry the payment for interest and payment for…

Q: tarting next year, you will need $5,000 annually for 4 years to complete your education. (One year…

A: Variables in the question:Withdrawal per year (PMT)=$5000N=4 yearsRate=7% p.a.

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.