Candace borrows $4000 from Nick due in 10 years with simple interest at 8% monthly. Two years after the debt is contracted, Nick needs money. So, he sells the note to a random stranger on the street (To Nick’s defense, the stranger had cash.) for an amount based on 10% monthly. What are the proceeds?

Q: Rich buys a car for $34,000 and has two options for financing. The dealership offers either…

A: Time value of money :— According to this concept, value of present money is greater than the value…

Q: Jan Guerra lends $9000 to her second cousin using a 180-day 10% simple interest note that was signed…

A: The note can be long-term or short-term. The notes issues for less than a year are called short-term…

Q: Greg wants to buy a $25,000 car today, but he doesn’t have the cash to buy it. The dealership is…

A: Loans are paid by equal monthly fixed types of payments and these payments carry the payment of…

Q: Adam purchases a house and gets a 20-year mortgage for $185,000 at 5.5% APR. In addition to the…

A: The objective of the question is to calculate the total monthly payment that Adam has to make to the…

Q: George buys a car every 6 years for ₱18,000. He trades in his current car to count as the 20%…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Nate agreed to pay $550,000 for a house. He made a $125,000 down payment and financed the balance…

A: We need to use loan amortization formula below to calculate monthly payment PMT =P*i1-1(1+i)n where…

Q: Hans takes out a loan for his college tuition from a bank that charges simple interes annual rate of…

A: In simple interest there is interest on the loan amount only and there is no interest on interest…

Q: Peter wins a lottery that pays to the holder a monthly annuity in the amount of $820 per month for…

A: The future value of an annuity refers to the total value of a series of equal, periodic payments or…

Q: Alan loans $3750 to Betty at a 6.2% simple interest rate. Betty agrees to repay the loan after 13…

A: Simple rate of interest is calculated by multiplying the rate with principal and adjusting the same…

Q: Lawrence signs a note promising to pay Justin $2500 at 11.25% compounded monthly in 7 years.…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: To be able to buy a new computer, Donna decides to save for 5 years. She opens a savings account…

A: Simple Interest = P * R * TWhere P = Principal = $400R = Rate of Interest = 3%T = Time = 5 years

Q: Suzanne opens a line of credit at a local bank, and immediately borrows 1510 dollars. 5 months…

A:

Q: The effective interest rate to the nearest percent for the financing arrangement for the five annual…

A: The effective rate of interest, also known as the effective annual rate (EAR) or annual equivalent…

Q: Two years ago, Paul borrowed $10000 from his sister Gerri to start a business. Paul agreed to pay…

A: Borrowed amount = $10,000Interest rate for first 2 years = 4%Interest rate for next 5 years = 3%To…

Q: A couple buys $160000 home, making a down payment of 17%. The couple finances the purchase with a 15…

A: Here, Particulars Values Purchase value   $ 160,000 Down payment 17.00% Number of years…

Q: Milo borrows $5.000 from an institution that charges 8.5% interest per year. How much more will Milo…

A: Loan are amount borrowed from the financial institution and is the amount charged above the loan is…

Q: Steven wants to buy a new couch priced at $591 and agrees to pay for it over two years with a…

A: Simple interest on a loan is a method of calculating interest where the interest is calculated only…

Q: Fritz Benjamin buys a car costing $7900. He agrees to make payments at the end of each monthly…

A: The time value of money is the idea that a monetary amount is worth more now than it will be at a…

Q: Some time ago, Marie took out a loan from the bank to purchase an apartment. The terms of the loan…

A: in this we have to find effective interest rate and than find out present value FACTOR.

Q: John is planning to take a loan for a major renovation project for his home. He can afford only 10%…

A: Annual salary of John = $80,000Annual interest rate = 8%Period = 5 years

Q: Tristan Sandino is selling his motorcycle. His friend, Rudy, is offering to pay cash in the amount…

A: Step 1: Given Value for Calculation Compound = Monthly = 12Monthly Payment = p = $300Time = t = 4 *…

Q: Noel purchases a house and gets a 15-year mortgage for $155,000 at 4.75% APR. In addition to the…

A: Monthly payment refers to the amount that is paid by the borrower to the lender at the end of each…

Q: Bob has lost his job and had to move back in with his mother. She agreed to let Bob have his old…

A: Time value It tells that the money today received by the individual has more value than receiving…

Q: 6. Jake and Archie are looking for places to live. Jake decides to rent a house for $1400 Archie…

A: Interest is the periodic obligation of the borrower to pay towards the sum borrowed. The monthly…

Q: Rob borrowed $5,800 from Richard and signed a contract agreeing to pay it back 10 months later with…

A: In this we have to calculate the interest on both contracts and than get the final price.

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.