Emily borrows a 2-year loan amount L, which she has to repay in 24 end-of-themonth payments. The first 16 payments are $1,000 each and the final 8 payments are $2,000 each. The nominal annual interest rate compounded monthly is 12%. Find L and then find the outstanding balance right after the 12th payment has been made.

Q: Nick’s car loan requires payments of $472.77 at the end of every month for five years, including…

A:

Q: Payment rate = i 729.18 dollars per year Interest paid i 12395.98

A: We first need to determine the effective annual rate using the formula below: EAR = einterest rate -…

Q: Gabriela's monthly payments of $567.89 will pay off her mortgage loan in 7 years and 5 months. The…

A: Monthly payment (X) = $567.89 n = 7 years 5 months = 89 months r = 6.6% per annum = 0.55% per month

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.

Q: Nicole loans P900,000 from bank today which gives her 10% interest rate compounded annually. Based…

A: Loan amount (L) = P 900000 r = 10% n = 10 payments Let the annual payment = A

Q: Jaclyn and Henry secured a $ 225, 000 mortgage at 5% annual interest for 20 years. This results in a…

A: The amortization refers to the systematic and regular repayment of loan principal and interest…

Q: Wade Ellis buys a new car for $16,882.14. He puts 10% down and obtains a simple interest amortized…

A: An amortized mortgage refers to a type of loan where the borrower makes regular payments over a…

Q: Cynthia is 27 and has 3 years' worth of payments remaining on her student loan. She pays $312.75 a)…

A: Present value of annuity is the sum of the present value of all the cash flow in the future.

Q: Connie wants to have an annuity payment of $2000 at the end of every three months. How much should…

A: Given information: Annuity payment is $2,000 Interest rate is 6% compounded quarterly Number of…

Q: urt borrowed from a bank and wants to start paying P50,000 annually at the end of the 4th year. If…

A: In this we need to find the present value of payment today.

Q: 5. Jenna received a 15 year loan of $375,000 to purchase a 5.10% compounded semi-annually. a. What…

A: Loans are paid by the fixed monthly payments and these payments carry the payment for interest and…

Q: Fred and Ethel are going to take out a business loan on which they will make annual payments of…

A: An amortized loan is a type of loan where the borrower makes regular fixed payments over the loan's…

Q: a) i) Ali is paying off a loan by making $50 payments at the end of every month for 2 years, at 6%,…

A: Loan is a borrowed amount taken for the purpose of completing the shortage of funds. When an…

Q: nna is buying a house selling for $285,000. To obtain the mortgage, Anna is required to make a 20%…

A: We need to use loan amortization formula to calculate monthly payment. The formula is  PMT…

Q: 10. Aleq borrows P9,500 and agrees to pay the compound amount after 5 years. If interest is at the…

A: The compound value of money can be depicted as the amount of interest generated on interest earned…

Q: If Rita receives $36.44 interest for a deposit earning 6% simple interest for 10 days, what is the…

A: Interest received = $36.44 Interest rate = 0.06 or 6% Number of days = 10 Amount deposit = ?   In…

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

A: The mortgage is the obligation to pay back the debt amount taken as a loan for satisfying the need…

Q: 11. Max buys a bedroom set for $2500. The dealer gave him a 3-year add-on interest loan at 6.5%…

A: Interest calculated on Original value of a loan is called Simple Interest.

Q: ) Nancy takes out a 22-year home loan. She makes equal month-end repayments including the principal…

A: Loans are paid by the equal monthly installment and these carry the payment for interest rate and…

Q: If Rita receives $36.44 interest for a deposit earning 6% simple interest for 10 days, what is the…

A: To calculate the deposit amount we will use the below formula   Deposit amount = I/(r*d/365) Where I…

Q: Trevor took a loan of $7,700 from her parents to purchase equipment for her hair salon. If they…

A: We have to find the quarterly payment that will amortize the loan in full. It's a time value of…

Q: 19. Stacy makes monthly payments of $450 to pay off her student loan. Due to unem- ployment, she…

A: Compounding refers to the concept of earning interest on interest. The compounding interest is…

Q: Mrs Angngad acquired a loan of P50000 from a credit union that charges interest of 16% compounded…

A: Loan amount = P 50,000 Annual interest rate = 16% Quarterly interest rate = 16%/4 = 4% Annual period…

Q: 3. Timmy borrows $10,000 and agree to make annual payments for five years (beginning one year after…

A: Borrowed amount = $10,000 Interest rate = 0.07 First payment = $1,000 Second payment = $2,000 Third…

Q: Nadhirah needs to pay RM168.28 every month for a loan of RM7,000 from XYZ Bank at 7.2% compounded…

A: Given, The monthly payment is RM 168.28 Loan amount is RM 7000 Rate is 7.2% compounded monthly

Q: A. Aisha borrowed R.O 80,000 to pay her child’s education at Muscat College. Aisha must repay the…

A: Loan: It is the amount of money borrowed from a person or bank or company for a certain period…

Q: ow it's time for you to practice what you've learned. uppose Teresa receives a $37,000.00 loan to be…

A: Loan amount = $37,000.00Interest rate = 8%Number of years = 3 years

Q: Emily receives R1 500,00 from the bank now that charge 10,5% simple discount per annum. She has to…

A: To find the number of months after which Emily pays back the loan, we can use the formula for simple…

Q: Peterson wants to make bi-weekly, end of period payments of $2,000 on a loar If the term of the loan…

A: We have to calculate annual payment and from that we can calculate present value of loan.

Q: At the end of every 3 months, Sam deposits $150 into an account that pays 6% compounded quarterly.…

A: Investors invest in particular securities with an expectation of receiving some gains in future. The…

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.