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: 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: 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: 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: Juan borrows $25,000 at 7% compounded annually. If the loan is repaid in five equal annual payments,…

A: What are installments? Installment is the sum of money to be paid in a particular time frame to pay…

Q: Ava Darling plans to buy a home and can deposit $1,772 per year for the next 5 years.. If the annual…

A: To calculate the future value of Ava Darling's deposits for the down payment, we can use the future…

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: At the end of every 6 months, Tomas deposits $20,000 into a savings account, which pays an annual…

A: Compound = Semiannual = 2Saving Deposits = d = $20,000Interest rate = r = 12.3 / 2 = 6.15%Time = t =…

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: Reuben has the option of receiving a loan of $13,625 for 8 years at an interest rate of either 4.73%…

A: Future value, FV = P(1+r/k)^n*k  Where P is the loan value. r= rate. k = compounding  n= number of…

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: o acquires a loan of $300,000 to be paid off during 6 years with monthly payments. If the…

A: Monthly payments are equal fixed amount of payment that carry the payment for interest and loan but…

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: 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: Theo wants to take out a loan. He takes out a loan for 15000 dollars at 3,7% quarterly interest,…

A: Given information,Loan amount: Interest rate: Payment per period: Total years: To calculate,Amount…

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: To buy a house, John takes out a fixed-rate amortizing mortgage of $270,000 for 20 years, with an…

A: Loan amount (PV) = $ 270,000 Annual interest rate = 9% Monthly interest rate (R) = 9%/12 = 0.75%…

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

A: Installment is the periodic amount paid by the borrower to the lender in order to pay back the loan…

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: Max buys a $2,000,000 house and makes a $500,000 down payment. The mortgage is for 30 years at 4%…

A: Monthly payments is calculated by EMI formula i.e. present value of annuity formula. For calculation…

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: Bryce and David plan to purchase a home for $176,000. They will pay 20% down and finance the…

A: Down payment = 20% Loan (L) = 80% of $176000 = $140800 n = 15 years = 180 months r = 8.2% per annum…

Q: John contributes $5,000 per month into an account. How much will he have in the account after 25…

A: In the given question we require to calculate the future value of account after 25 years is john…

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…

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.