Installment Contracts Glenda sold her house under an installment contract whereby the buyer gave her a down payment of $25,000 and agreed to make monthly payments of $875/month for 30 years. If the prevailing interest rate is 5%/year compounded continuously, find the present value of the purchase price of the house. (Round your answer to the nearest dollar.)

Q: uestions below

A: Compound interest is used in case of lump-sum money accumulates in the future if interest is charged…

Q: Mr. Padilla agrees to pay P1,300.00 at the end of each month for 20 years, in purchasing a house.…

A: The PV of an asset refers to the value of all its future cash flows discounted at an assumed rate of…

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A: Principal (p)= $750,000 Rate (r)= 2.7% Time (t)= 5 years

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Q: TIME VALUE OF MONEY In purchasing a lot, Steve agrees to pay $10,000 cash and $5,000 at the end of…

A: Since, payment is made at the end of each quarter so it is the case of ordinary annuity and as per…

Q: TIME VALUE OF MONEY In purchasing a house, Homer agrees to pay $10,000 cash and $5,000 at the end…

A: Present value is a current value of the amount to be received in future. The present value of an…

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: Lily purchased a boat valued at $19 000 on an installment plan requiring equal monthly payment for…

A:

Q: A couple plans to purchase a vacation home. The bank requires a 10% down payment on the s210,000…

A: We need to use PMT equation to calculate monthly payment. The equation is PMT =P*i1-1(1+i)n where…

Q: Carl has purchased an annuity to be paid at the end of each month for 20 years at an effective…

A: Present Value of Annuity = 200,000 USD YEars = 20 Terms(n) = 20*12 = 240 Rate of Interest(r)  =4%/12…

Q: Frank had originally promised to pay Jane $1,500 3 months ago, $1,000 today and $1,000 6 months from…

A: Compounding and discounting are the ways to consider the money’s time value at given rate.…

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A: A fixed rate mortgage is one in which the interest rate remains constant over the entire term of the…

Q: Mary buys a 20 year annuity immediate for $100,000 subject to 6% effective annual interest rate. The…

A: Total number periods in annuity are 20 Purchase price of annuity is $100,000 Effective interest rate…

Q: Elizabeth pays $294.50 for a car lease at the beginning of every month for 1 years and 8 months at…

A: The first part of the question is asking us to identify the type of annuity Elizabeth has for her…

Q: Simple interest amortized loans Find the monthly payment and total interest Wade buys a new car…

A: Using the PMT function

Q: To help buy her new condominium, Maria is taking out a $154,000 mortgage loan for 30 years at 3.7%…

A: The loan is a value that is borrowed from external sources like banks and this amount is repaid…

Q: Part 1: Natasha purchases a payout annuity on 1/1/2023 with 120 payments; $50 monthly payments made…

A: Here,

Q: Gabry Ponte has a contract in which he will receive the following payments for the next five years:…

A: Time value of money is a concept where we consider interest eliminate for time period. This concept…

Q: A woman paid 20% down payment of P300,000 for a house and lot and agreed to pay the balance on…

A: given, price = p300,000 downpayment = 20% r=15% m=12 (monthly compounding) pmt = p 33,396.51

Q: will make a down payment of ge a mortgage for the rest at 5 pounded semi-annually for 25 rmine the…

A: Mortgages are to be paid by the monthly payment that includes the payment for principal and interest…

Q: Erica purchases a retirement annuity that will pay her $1,500 at the end of every six months for the…

A: Purchase price of annuity would be the present value of payments received from annuity based on time…

Q: Fritz Benjamin buys a car costing $14200. He agrees to make payments at the end of each monthly…

A: An amortization schedule is a complete table of periodic loan payments, showing the amount of…

Q: (Annuity payments) Emily Morrison purchased a new house for $180,000. She paid $60,000 upfront and…

A: The present value of all future payments should be equal to the cost of house financed.

Q: Celine has established that she can afford a weekly payment of $1,450.00. She would like to have a…

A: Mortgage amount refers to the money that is being borrowed by the borrower from the lender at a…

Q: In purchasing a house, Keith agrees to pay $10,000 cash and $5,000 at the end of each 6 months for…

A: Present value of money is the value which is calculated by multiplying the future value by the…

Q: A home buyer buys a house for $225, 000. She pays 20% cash, and takes a fixed - rate mortgage for…

A: The objective of the question is to calculate the biweekly mortgage payment for a home buyer who…

Q: en problem. Problem: Mrs Talla obtained a loan of P200,000. She has to repay the loan by equal…

A: The given problem can be solved using PMT function in excel. PMT function computes installment…

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A: A loan is a sort of debt that is taken on by an individual or another institution. The lender, which…

Q: Doris purchased a Steinway concert piano for $132,000 with a down payment of 25%, and a loan for the…

A: Cost of piano is $132,000 Down payment is 25% Equal Monthly Payment is $1,650 Interest rate…

Q: Kate owes P120 000 due in 4 years plus the accumulated interest from today at 13% compounded…

A: Loan amount today (L) = P 120000 Loan amount is due in 4 years. r = 13% per annum = 3.25% per…

Q: What is the balance of the loan at the end of year 3? $0.00 Round to the nearest cent c. By how much…

A: Loans are paid by the monthly equated payments that carry the payment for loan principal amount and…

Q: Mrs mhlauli purchases a new dining table from Bradley , placing an immediate deposit of R2000 and…

A: given, downpayment = R2000 A = R240 N = 5 R=6% m = 12

Q: 5. Jenna received a 15 year loan of $375,000 to purchase a house. The interest rate on the loan was…

A: Loan amount  $                               3,75,000.00 Interest rate 5.10% compounded…

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.