Lily signed a personal loan for $7,500 with Joanne, her aunt, to pay her MBA tuition fees during the first year of her study. In the agreement, Lily promised to pay Joanne the principal plus 3.8% interest on this loan to compensate Joanne against the expected inflation on overall groceries and other costs Joanne has to cover per year based on the average rate of inflation observed in Canada since 1960 to 2021. Lily will start to make the first payment upon her graduation. a) Calculate the amount of annual interest for this loan. b) Calculate the amount of interest Lily saves if she pays back the loan six months upon

Q: A father is planning a savings program to put his daughter through college. His daughter is now 13…

A: Annuity payment Annuity payments are money invested or deposited on a regular interval such as…

Q: Chuck Ponzi has talked an elderly woman into loaning him ​$50,000 for a new business venture. She​…

A: Using loan amortization table to find the cashflow and installment payment. Using excel pmt function…

Q: Rhett is about to begin college (4-year) and has received a 10-year $7,500 Federal Direct…

A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

Q: The cost of tuition at the college that Lacy wants to attend is $12,500 per year. Lacy’s family will…

A: Total Amount to Save = $12,500 x 30% = $3,750

Q: aria secure a loan of $12,000 3 years ago from a bank for used toward her college expenses. The bank…

A: Equated monthly installments (EMI) is the equally divided installments of the loan outstanding…

Q: Tatsuo has just been awarded a four-year scholarship to attend the university of his choice. The…

A: Time = t = 4 YearsPayment = p = $16,000Interest Rate = r = 4.5%

Q: Brittany's parents want their child to go to the same college that they did. After talking with the…

A: Working of the amount put down by the Brittany’s Parents is shown: Hence, the amount deposited will…

Q: Angelica Riordan received a four year non-subsidized student loan of $15,000 at an annual interest…

A: Equated monthly payments It is a monthly fixed payment given by the borrower to the lender on the…

Q: Janet's parents want her to go to the same college that they did. They decided to pay a lump sum…

A: Given information,Compounding frequency: QuarterlyAmount deposited: Rate: NPER for future value:…

Q: Katrina has the option of an 8-year nonsubsidized student loan of $29,000 at an annual interest rate…

A: A subsidized loan refers to a loan (usually provided to students) where the loan does not accumulate…

Q: Megan Berry, a freshman horticulture major at the University of Minnesota, has some financial…

A: The present value is calculated by discounting the future value received over the period of time. An…

Q: Discount loan (interest and principal at maturity). Chuck Ponzi has talked an elderly woman into…

A: Maturity value refers to the total amount that is repaid to the investors up to the end of the loan…

Q: Discount loan (interest and principal at maturity). Chuck Ponzi has talked an elderly woman into…

A: Maturity value refers to the total amount that is repaid to an investor up to the end of the loan…

Q: How much money can they expect to withdraw?

A: Future value of ordinary annuity refers to the sum total value of all deposits made periodically at…

Q: You finance your college education with a student loan. Every month, you borrow $1,000 to pay for…

A: Future value of annuity is computed as follows:-FV = A*whereFV= future value of annuityA= periodic…

Q: A college student, needs to borrow $5,000 today for his tuition bill. He agrees to pay back the loan…

A: Time period is 5 years Borrowed amount is $5,000 Amount to be paid is $7012.76 To Find: Nominal…

Q: Natasha is going to take out an unsubsidized student loan of $13,500 at a 4.2% APR, compounded…

A: An unsubsidized student loan is a loan on which interest starts accruing the day money is deposited…

Q: 1. Phil Nelson anticipates he will need approximately $227,000 in 11 years to cover his daughter's…

A: As per Bartleby guidelines, If multiple questions are posted, only the first 1 question will be…

Q: Kelsey's parents wère unable to pay for her last year of college, so she obtained a student loan of…

A: Loan: It represents the amount borrowed from the lender by the borrower in exchange for repayment…

Q: Stéphanie visited a financial institution and signed a 10-year, non-interest-bearing promissory note…

A: Value of promisory note is $6000 Years to maturity is 10 years Interest rate is 2.15% Compounded…

Q: Liam just graduated from his state university with ​$28 comma 90228,902 in student loan debt. He is…

A: The first part of the question is asking for the monthly payment Liam would need to make to repay…

Q: Theodora received an 8-year PLUS Loan of $17,000 to attend law school for her last 2 years. If the…

A: Step 1 The amount paid each month to repay the loan over the course of the loan is known as the…

Q: A mother wants to invests 9,000.00 for her sons future education she invests a portion of the money…

A: Solution:- Interest is the return amount on money invested.

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.