Farouk bought an electric appliance through an instalment plan which he paid RM200 down payment. He had to make 12 monthly payments of RM120 each month to settle the unpaid balance. If the dealer charged him an interest of 5% per annum on the original balance, find the cash price of the item.

Q: ce. She financed the remaining balance for 9 months at an annual interest rate of 5.5% compounded…

A: Answer : Annual interest rate = 5.5% Effective annual interest rate = ((1+5.5%/12)^12-1) Effective…

Q: Gregorio bought a car with funds borrowed from a commercial bank. He intends to repay the note with…

A: Par value (FV) = P750,000 Discount rate (r) = 12% Period (d) = 270 days

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: Bernie purchased a riding lawn mower for $1,320. The store offered him a 3-year add-on loan at an…

A: Computation:

Q: evin bought a washer and dryer for $1050 but only had a down payment of $150.00. He financed the…

A: In add on method we simply add interest for given period and add to that with principal amount.

Q: omplete amo

A: fixed Monthly payment = P*R* ((1+r)^n)/((1+r)^n-1) P= Loan amount R= 5.90%/12= 0.4916% N= 12*0.5= 6…

Q: a. Kim pays ₱2,000 every two months to settle his obligation for two years at 8% compounded…

A: a. The present value can be calculated using the PV Function.  b. The monthly payment can be…

Q: A purchased a small condominium. He paid P350,000 as a down payment and agreed to pay P35,000 every…

A: Down payment = P350,000 Quarterly payment = P35000 Interest rate = 12% Quarterly interest rate =…

Q: Your father purchased a townhouse with a cash price of 1.5M. He was able to negotiate with the…

A: We need to use present value of annuity formula given below to calculate monthly payment amount…

Q: Jim made a down payment of 2500 dollars toward the purchase of a car. To pay the balance of the…

A: Given information: Down payment is $2,500 Nominal interest rate is 4% compounded monthly Payment of…

Q: Russel purchased a brand new car. He paid a P250,000 down payment and P16,500 payable every 17th day…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: Sean buys a refrigerator for $899. The dealer gave him a 2-year add-on interest loan at 7.8%…

A: A method of the loan in which the amount of installment is evaluated by combining the principal and…

Q: Lee purchased a laptop and promised to pay P2500 every month for 2 years, beginning on the date of…

A: Purchase of Assets on Loan Monthly payment Need to calculate prepayment price to close the liability

Q: Blake bought a new car and financed $⁢15,000 to make the purchase. He financed the car for 60 months…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: Chiara purchased a new natural gas barbecue for $2,300 and made a down payment that was 30% of the…

A: Purchase price = $2300 Down payment = 30% of Purchase price = 0.30×$2300 = $690 Loan amount =…

Q: Benjamin borrows $50,000 from a lending institution for building a house. The lending institution…

A: The question is based on the concept of amortization of mortgage loans. A mortgage loan is paid back…

Q: Mr. Anton received two offers for the old equipment he is selling. Mr. Brando will pay P6,500 in…

A: Payment by Mr Brando P 6,500 Down payment by Mr Castilla P 1,000 Monthly payments by Mr.…

Q: (a) What is the value of the CD when it matures? $ (b) Three months before the CD was due to mature,…

A: Simple interest is quite simple and there is no interest on interest and used for period less than…

Q: Anna purchases a smartphone for P28,000. She makes a 15% down payment and agrees to repay the…

A:

Q: Karl Yates needs $5,000 to pay for the remodeling work on his house. A contractor agrees to do the…

A: Given, The amount required is $5,000 Rate of interest is 6.3% Term is 10 months

Q: simon's cost for a new computer with accessories was $3120. he made a down payment of $550 in…

A: Company would be paying the interest on the amount borrowed for the purpose of paying late. The more…

Q: Determine whether it is simple ordinary annuity, general ordinary annuity, or deferred annuity. 1.…

A: Simple ordinary annuity = Payments made at the end of each period with same compounding frequency as…

Q: Jow just bought a new Toyota Cross for his business. The price of the vehicle was RM128,000. Jimmy…

A: Present Value of Annuity Due refers to a concept which determines the value of cash flows at present…

Q: Mohammed got a $500 cash advance using his credit card, which charges 21.9%, compounded daily. He…

A: Credit card is one of the loan source through which a person can spend money without actually having…

Q: Mary bought an electric oven listed as RM 3500 cash through an installment plan which she paid RM…

A: Answer:- a Computation of total interest charged:-  Cost of oven                  = RM3500 Less:-…

Q: Karl Yates needs $9,000 to pay for the remodeling work on his house. A contractor agrees to do the w…

A: The today value of future amount is the equivalent amount based on time period and interest rate…

Q: Chiara purchased a new natural qas barbecue for $2,200 and made a down payment that was 30% of the…

A: Annual interest rate = 5.5%   Effective annual interest rate = ((1+5.5%/12)^12-1)   Effective annual…

Q: Larry purchased a gnu combined that cost 210,500, minus a rebate of 5500, a trade-in of 6500, and a…

A: Combined cost = 210,500 rebate = 5500 trade-in = 6500 Down payment = 9000 APR = 8%

Q: Mr. Al Khasim deposited OMR 20,000 in a bank which offers a compound annual interest of 6%. How long…

A: Compound interest is one of the form of interest under which interest is charged on both principal…

Q: and the interest is 12% compounded monthly

A: Present value computes the existing value of future benefits by discounting future worth with a…

Q: An employee obtained a loan of P100,000.00 at the rate of 6% compounded annually in order to build a…

A: The series of monthly payments is a form of annuity wherein an equal amount is paid every month.

Q: Casey secured a 5-year car loan at 6.20% compounded annually that required him to make payments of…

A: Present Value represents the value of a future amount in today's dollars, taking into account…

Q: 4 years. His Monthly loan was 23.03. What was the monthly payments and what was the total interest…

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

Q: Karl Yates needs $6,000 to pay for the remodeling work on his house. A contractor agrees to do the…

A: Present Value refers to the discounted value of a single cash flow or multiple cash flows today…

Q: Jenna bought a new car for $⁢39,000. She paid a 10% down payment and financed the remaining balance…

A: Monthly mortgage payment: The monthly mortgage payment is the repayment of a mortgage loan by paying…

Q: Casey purchased a machine for $28,500 for his company. He paid 5% of this amount as a down payment…

A: A loan is a contract between two parties where money is exchanged on the promise of future repayment…

Q: Iskandar has to pay RM19 000 in total to settle a three-year loan by making equal monthly payments…

A: Given information,Amount: NPER:  years Payment frequency: MonthlyRate: Compounding frequency:…

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.