Maria agreed to pay Php100,000.00 down payment and Php 50,000.00 bi-monthly installments for the car in 2 years. For 5 payments she was not able to pay. On the 6th payment, she is required to pay the entire debt consisting of her accumulated and future liabilities, otherwise, she must return the car. If the money is worth 5 % compounded annually, what amount is she required to pay?

Q: Maria saved money for her dream house but she needed Php700,000 more to complete the deal. The banks…

A: We take loans or mortgages to purchase large ticket items like a car or a house. The loan or the…

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: Nate agreed to pay $550,000 for a house. He made a $125,000 down payment and financed the balance…

A: We need to use loan amortization formula below to calculate monthly payment PMT =P*i1-1(1+i)n where…

Q: Luis is expected to settle a loan by paying $5,500. What amount should she pay if she decides to…

A: To calculate the amount Luis should pay if she decides to settle the loan seven months earlier, we…

Q: compounded daily. Answer the questions below. Do not round any intermediate computations, and round…

A: More is compounding of interest more is annual effective interest rate and more is accumulated…

Q: Margarita borrows R10,000 from her uncle and agrees to repay it in monthly instalments of R200. Her…

A: Loans are paid in equal monthly payments and these payments carry the payment for interest and…

Q: Akbar bought a car on loan and pays the simple interest at 5% amounting to RO 3,000 per annum for 5…

A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…

Q: Sarah secured a bank loan of $150,000 for the purchase of a house. The mortgage is to be amortized…

A: A mortgage is a loan used to purchase a property or real estate. The property serves as collateral…

Q: Kristen purchased a car for $43,000; she paid $2150 as a down payment and financed the balance…

A: Here, Value of Car is $43,000 Down Payment is $2,150 Therefore, Loan Amount is : =$43,000-$2,150…

Q: While buying a new car, Alexis made a down payment of $1,200 and agreed to make month - end payments…

A:

Q: A. Payback. The company requires all projects to payback within 3 years. Calculate the payback…

A: Payback period = Year of last negative cash flow + (Absolute value of last negative cash flow/Next…

Q: Ms. C took a loan of $150,000 at a rate of 7 percent. She can pay equal installments of $25,000 at…

A: PV(loan amount) = 150,000I/Y (interest rate) = 7%PMT (periodic payment) = 25,000

Q: When Albertina opened her law office, she bought $19,000 worth of law books and $7600 worth of…

A: The question is based on the concept of annuity in financial management. Annuity refers to the…

Q: While buying a new car, Austin made a down payment of $1,000.00 and agreed to make month-end…

A: Present value is the estimation of the current value of future cash value which is likely to 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: Sarah secured a bank loan of $155,000 for the purchase of a house. The mortgage is to be amortized…

A: When a loan is taken to buy a big ticket item like a house the borrower usually makes monthly…

Q: The purchaser of a car paid $10,000 cash and agreed to pay $3000 at the end of 6 months for 10…

A: Calculate the future value of the annuities (PMT) that are not paid till the end of 3rd Year.…

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.