Chase Boyd plans to borrow $6,000 for 4 years. The loan will be repaid with a single payment after four years, and the interest on the loan will be computed using the simple interest method at an annual rate of 11 percent. How much will Chase have to pay in four years? $   How much will he have to pay at maturity if he's required to make annual interest payments at the end of each year? $

Q: Amna has a housing loan of $50,000 over 15 years with a 6% interest rate. According to the Bank he…

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

Q: Chester hopes to earn $1200 in interest in 2.5years time from $60,000 that he has available to…

A: The annual interest rate that is charged by the lenders or at which the investors earn additional…

Q: Ms. Aay is considering to deposit $500 every six months, and would receive interest at an annual…

A: Semi annual deposit (P) = $ 500 Annual interest rate = 8% Semi annual interest rate (r) = 8%/2 = 4%…

Q: Mark deposits $50,000 now into an account which will eam interest at a rate of 7% per year, how much…

A: Present value = $50,000 Interest rate = 7% Number of years = 4

Q: Lester hopes to earn $1100 in interest in 2.2 years time from $22,000 that he has available to…

A: We need to use future value formula to calculate annual interest rateFV = PV(1+r)nwhereFV = Future…

Q: Bill Jones plans to deposit $2100 at the end of every 6 months for the next 20 years into an annuity…

A: Calculation of the total value of the annuity at the maturity is shown below: Hence, the total…

Q: Aidan deposits $1000 at the end of each quarter in an account that pays 5.25% per year, compounded…

A: Solution: An equal amount invested every period is called annuity. So, future value of annuity = PMT…

Q: Nick saves $175 per month, deposited directly into his credit union account on payday, the last day…

A: In order to calculate the amount at the end of a specific period of time, the future value of the…

Q: Diego is getting a mortgage for $320,000 at a rate of 4.5% for 30 years. What is his monthly payment…

A: Monthly Payment is the payment that is to be paid monthly for a specific period of time to repay the…

Q: Alex estimates that he will have $47,500 in student loans by the time he graduates. The interest…

A: Here, Present Value is $47,500 Interest Rate is 7.2% Therefore, the Monthly Interest Rate is : Time…

Q: John takes out a 5 year loan for $10000 at 8% interest compounded monthly. Calculate his monthly…

A: The annuity is an amount that is paid back to the loan amount which consists of interest payments…

Q: Roberto and Micah plan to purchase a home for $225,000. They will pay 20% down and finance the…

A: Monthly installment = loan / cumulative PV factor Monthly installment = loan / PVAIF (0.308333%,…

Q: Taylor will make payments of $150 at the end of every month to settle a loan of $1,300 at 5.10%…

A: Montly payment(PMT) = $150 Loan Amount = $1,300 Rate = 5.10% Compounded semi- annually

Q: Patrick makes payments of $250 per month at the end of each month. At the end of 10 years, he wants…

A: The rate of interest required to have the desired amount can be calculated with the help of rate…

Q: Ali deposits $450 at the beginning of every quarter. He wants to build up his account so that he can…

A: Future value of the amount is the amount of deposit done and amount of compounded interest…

Q: Ms. Aay is considering to deposit $600 every six months, and would receive interest at an annual…

A: In the given question, semi-annual deposits of $ 600 are made for next 5 years, wherein first…

Q: If Phil borrows $40,000 from a loan company at an interest rate of 6.5% per year compounded weekly,…

A: Here, Loan amount = $40,000 Quarterly payment of the loan = $800 Interest rate = 6.5% compounded…

Q: You plan to deposit $200 at the end of every six months for 8 years starting at the end of month 6.…

A: Answer: Calculation of the amount that will be available to withdraw at the end of year 15: The…

Q: Leo needs a home loan. According to his income, he could borrow $1405956 in maximum when the…

A: Loan amortization refers to the process of paying off a loan over time through regular payments that…

Q: Connie wants to have an annuity payment of $2,250 at the END of every three months. How much should…

A: Present value of annuities will give what is cash amount to be paid today.

Q: Charlie wants to withdraw $12,000 each year forever from his account. At an interest rate of 6% per…

A: Perpetuity is the stream of cash flows or payments that are made at equal intervals that do not have…

Q: Nick has just signed a 30-year, fixed-rate mortgage for $180,000 with a nominal annual rate of 7.6%.…

A: We need to use PMT and NPER function to calculate monthly payment and number of periods to pay off…

Q: Willie Wilson plans to borrow $21, 185 at the beginning of each of his 4 years of college. He will…

A: Step 1: Given Value for Calculation Present Value of Borrowing = pv = $21,185Time = t = 4…

Q: Bill Jones plans to deposit $2100 at the end of every 6 months for the next 20 years into an ammuity…

A: Semi-annual payments (C) is $2,100. Number of payments (n) is 40 (20×2). Semi annual Rate of return…

Q: They plan to invest in an ordinary annuity that earns 7.2% interest compounded quarterly. Payments…

A: An annuity is a series of regular payments that are provided in exchange for a lump sum amount paid…

Q: Harry Taylor plans to pay an ordinary annuity of $6,000 annually for ten years so he can take a…

A: Ordinary Annuity is series to equalized payments received or made over periodic interval at end of…

Q: Bozo decides to take out a loan for $50,000 for 5 years at 7% monthly. If he pays an extra $200 per…

A: The periodic payment is the amount that will be paid every period until the loan amortized which…

Q: Harry Taylor plans to pay an ordinary annuity of ​$4,900 annually for ten years so he can take a​…

A: Future value of annuity = A x [{(1 + i)^n - 1} / i]where,i = interest raten = number of periodsA =…

Q: Jason Bradley has been paying on his 10-year mortgage loan and is excited to be making the final…

A: Loan amount (PV) = $ 128000 Interest rate = 5.8% Monthly interest rate (r) = 5.8%/12 =…

Q: A man is planning to retire in 20 years. He wishes to deposit a regular amount every three months…

A: Annual payments he will receive = $95000 Time period = 18 years  Interest rate = 8% Compounding =…

Q: William got a second loan for 78,000 dlls to be payable in 5 years with interest rate of 7.5 percent…

A: Loan amount (PV) = 78000 Period = 5 Years Number of monthly payments (N) = 5*12 = 60 Annual interest…

Q: Ben decides to take out a loan for $50,000 for 5 years at 7% monthly. If he pays an extra $200 per…

A: Using excel PMT function

Q: ladyn is looking to purchase a home for $182,000 and will make a $40,000 down payment in order to…

A: Mortgage loans are paid by easy monthly payments that carry the payment for interest and payment for…

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: How much would Doug save in interest if he amortized his mortgage over 15 years, rather than 25…

A: An amortized loan is a type of loan that is repaid in regular fixed installments over a specified…

Q: Brayden and Noah plan to purchase a home for $140,000. They will pay 20% down and finance the…

A: An annuity is a series of cash flows that involve an equivalent amount occurring at equal time…

Q: Fernando has the choice of taking out a 25-year loan for $150,000 at 6.6% interest, compounded…

A: Annuity payments refer to the set of fixed periodic payments that an investor or a depositor makes…

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.