Cash Call is a popular payday loan company offering consumer loans in person or online.On their website, they describe the terms of a $2600 installment loan at an effective APR of 139.13% (compounded monthly). The actual terms of the loan are a principal amount borrowed of $2600 with a $75 origination fee at 135% APR compounded monthly paid back over 47 monthly payments.In your calculations, use Y = 47/12 or 3.916667.PMT= P(APR/n)/[1-(1+APR/n)^(-nY)]a. Calculate the monthly payment for a $2600 loan at 135% APR over 47 months.Monthly Payment: $ _____________b. Compute the total of all payments, not including the $75 loan fee. (Use your rounded answer from part a.)Total Payments: $ _____________c. How much of the total payments (answer to part b) is interest?Interest: $ _____________ ### Case Study Summary: Cash Loans---#### Loans, Fast & Simple:**Select the amount you need to borrow:**- $100,000 Loan- $75,000 Loan- $50,000 Loan- $25,000 Loan- $10,000 Loan- $5,000 Loan- $2,000 Loan---**Instructions for Users:****a. Calculate the monthly payments.**---This case study summary provides an overview of loan options with varying amounts ranging from $2,000 to $100,000. The interface appears to be user-friendly, allowing individuals to select the amount they wish to borrow for a fast and simple loan process. To further assist users in financial planning, the case study prompts users to calculate the monthly payments associated with each loan amount.For educational purposes, users are encouraged to utilize financial formulas or loan calculators that consider interest rates and loan durations to determine accurate monthly payments. This practice will help in understanding the implications of different loan amounts on personal finances.

Loan is the type of debt instrument which is usually for long-term with the pre-defined interest…

On their website, they describe the terms of a $2600 installment loan at an effective APR of 139.13% (compounded monthly). The actual terms of the loan are a principal amount borrowed of $2600 with a $75 origination fee at 135% APR compounded monthly paid back over 47 monthly payments. In your calculations, use Y = 47/12 or 3.916667. PMT= P(APR/n)/[1-(1+APR/n)^(-nY)] a. Calculate the monthly payment for a $2600 loan at 135% APR over 47 months. Monthly Payment: $ _____________ b. Compute the total of all payments, not including the $75 loan fee. (Use your rounded answer from part a.) Total Payments: $ _____________ c. How much of the total payments (answer to part b) is interest?

On their website, they describe the terms of a $2600 installment loan at an effective APR of 139.13% (compounded monthly). The actual terms of the loan are a principal amount borrowed of $2600 with a $75 origination fee at 135% APR compounded monthly paid back over 47 monthly payments. In your calculations, use Y = 47/12 or 3.916667. PMT= P(APR/n)/[1-(1+APR/n)^(-nY)] a. Calculate the monthly payment for a $2600 loan at 135% APR over 47 months. Monthly Payment: $ _ b. Compute the total of all payments, not including the $75 loan fee. (Use your rounded answer from part a.) Total Payments: $ _ c. How much of the total payments (answer to part b) is interest?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 14P

See similar textbooks

Related questions

Q: A finance company uses the discount method of calculating interestThe loan principal is $4,500, the…

A: Discount method is one of the methods to provide a loan. Under this amount loan amount is provided…

Q: Assume that you start with a balance of $3900 on your credit card.During the first month you charge…

A: Here, Balance on Credit Card is $3900 APR is 29% Charges for first Month is $400 Charges for Second…

Q: A borrower has two alternatives for a loan: (1) issue a $360,000, 75-day, 6% note or (2) issue a…

A: Notes payable is a promise to pay certain amount by the buyer to the seller on a date and interest…

Q: Suppose you have a credit card with a balance of $3295.89 that charges 19.85% APR on unpaid…

A: Credit cards are used very often now days and credit cards are used for short term credits.Balance…

Q: For the car loan described, give the following information. A car dealer will sell you the $30,950…

A: In this problem we have to get interest rate from given data.

Q: calculate the monthly principal and interest, PI (in $),

A: Re-payment of loan consist of payment of principal and interest. Annuity is the payment of fixed…

Q: lending service, recen , how much can you borrow from E-Loan? What is the total interest you will…

A: Present value is represented by the current value of a sum of money that will be received or paid in…

Q: You have asked Raider Bank for a $20,000 signature loan, where you will be charged 1% per month…

A: It seems there might be a mistake or some missing information in this question. Let me clarify a few…

Q: Assume that you start with a balance of $3600 on your credit card. During the first month, you…

A: Given Starting balance is $3600 First month charge is $400 Second month charge is $550

Q: Calculate the table factor, the finance charge, and the monthly payment (in $) for the loan by using…

A: Table factor =1-1(1+r)tr Where r = Interest rate t = Number of month

Q: a) You currently owe $25,000 on a credit card with a 16% interest rate and a minimum payment of $25…

A: a. Using the credit card calculator at fincalc website, we can determine the time required to pay…

Q: The first product Suzie represents is a short term loan. Here, customers can borrow small amounts of…

A: Simple Interest: When the interest is charged or paid on a fixed principal over a given period is…

Q: I want to borrow $700 for ten days from a payday loan store. Here are the terms for the payday loan:…

A: Pay Day loan: A payday loan is a small personal cash loan at a very high interest rate, secured by…

Q: Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days…

A: Finance charge refers to the amount that is billed to the card account if the previous month’s total…

Q: Alexa takes out a loan of 94,000 at an annual effective discount rate of 6%. The loan is to be…

A: Present value (PV) is the current value of a future sum of money or stream of cash flow given a…

Q: A non-traditional lending source offers Megan a loan for $5,400. They require the loan to be repaid…

A: Cash flows to Megan; Year 0 = $5,400 Year 1-3 = - $2,100 Interest rate = ? We will calculate…

Q: A borrower has two alternatives for a loan: (1) issue a $630,000, 75-day, 6% note or (2) issue a…

A: Interest expense is the cost incurred for borrowing the fund. Interest is calculated on the…

Q: Jefferson Bank made a loan at 7% interest for 238 days. If the amount of interest was $300.81, use…

A: Interest rate = r = 7% Time = t = 238 days Interest amount = i = $300.81 Number of days under…

Q: Assume that you start with a balance of $3900 on your credit card. During the first month, you…

A: It is a case where the month-end closing balance of the credit card is required to be calculated for…

Q: An online lending company is offering simple interest personal loans based on consumer credit…

A: Simple interest refers to a method of calculation of interest due on a loan where the principal…

Q: A borrower has two alternatives for a loan: (1) issue a $570,000, 90-day, 7 % note or (2) issue a…

A: Interest expense is the interest to be paid on borrowings done. It is calculated by considering rate…

Q: E-Loan, an online lending service, recently offered 60-month auto loans at 4.2% compounded monthly…

A: Loan: It represents the amount provided by the lender to the borrower as the borrowed amount. The…

Q: A borrower with a 645 credit score is buying a $449,481 home with 95% LTV financing. The percent…

A: "home finance" means the financial plans and strategies people employ in order to buy or acquire a…

Q: A borrower has two alternatives for a loan: (1) issue a $420,000, 30-day, 6% note or (2) issue a…

A: Interest expense is the interest to be paid on borrowings done. It is calculated by considering rate…

Q: Pay it back Credit is a payday loan company that offers quick, short term loans using the borrower's…

A: Annual percentage rate (APR) refers to the annual cost of funds borrowed. The Annual percentage rate…

Question

Cash Call is a popular payday loan company offering consumer loans in person or online.

On their website, they describe the terms of a $2600 installment loan at an effective APR of 139.13% (compounded monthly). The actual terms of the loan are a principal amount borrowed of $2600 with a $75 origination fee at 135% APR compounded monthly paid back over 47 monthly payments.

In your calculations, use Y = 47/12 or 3.916667.

PMT= P(APR/n)/[1-(1+APR/n)^(-nY)]

a. Calculate the monthly payment for a $2600 loan at 135% APR over 47 months.

Monthly Payment: $ _____________
b. Compute the total of all payments, not including the $75 loan fee. (Use your rounded answer from part a.)

Total Payments: $ _____________
c. How much of the total payments (answer to part b) is interest?

Interest: $ _____________

### Case Study Summary: Cash Loans

---

#### Loans, Fast & Simple:

**Select the amount you need to borrow:**

- $100,000 Loan
- $75,000 Loan
- $50,000 Loan
- $25,000 Loan
- $10,000 Loan
- $5,000 Loan
- $2,000 Loan

---

**Instructions for Users:**

**a. Calculate the monthly payments.**

---

This case study summary provides an overview of loan options with varying amounts ranging from $2,000 to $100,000. The interface appears to be user-friendly, allowing individuals to select the amount they wish to borrow for a fast and simple loan process. To further assist users in financial planning, the case study prompts users to calculate the monthly payments associated with each loan amount.

For educational purposes, users are encouraged to utilize financial formulas or loan calculators that consider interest rates and loan durations to determine accurate monthly payments. This practice will help in understanding the implications of different loan amounts on personal finances.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

Trending now

This is a popular solution!

Step by step

Solved in 7 steps with 7 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

A borrower has two alternatives for a loan: (1) issue a $420,000, 30-day, 6% note or (2) issue a $420,000, 30-day note that the creditor discounts at 6%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. $ fill in the blank 2 for each alternative. Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar. (1) $420,000, 30-day, 6% interest-bearing note: $ fill in the blank 3 (2) $420,000, 30-day note discounted at 6%: $ fill in the blank 4 Alternative 1 is more favorable to the borrower because the borrower receives more cash .
A borrower has two alternatives for a loan: (1) issue a $360,000, 75-day, 6% note or (2) issue a $360,000, 75-day note that the creditor discounts at 6%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Calculate the amount of the interest expense for each option. Round your answer to the nearest dollar. $ ________________________ Determine the proceeds received by the borrower in each alternative. Round your answers to the nearest dollar. (1) $360,000, 75-day, 6% interest-bearing note: $___________________________ (2) $360,000, 75-day note discounted at 6%: $ _________________________
Can you please show me how to do this question, please?
A borrower has two alternatives for a loan: (1) issue a $570,000, 90-day, 7% note or (2) issue a $570,000, 90-day note that the creditor discounts at 7%. Assume a 360-day year. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. X Open spreadsheet a. Compute the amount of the interest expense for each option. Round your answer to the nearest dollar. for each alternative. b. Determine the proceeds received by the borrower in each situation. Round your answers to the nearest dollar. (1) $570,000, 90-day, 7% interest-bearing note: $ (2) $570,000, 90-day note discounted at 7%: $ c. Alternative is more favorable to the borrower because the borrower
What is the finance charge?
A finance company uses the discount method of calculating interestThe loan principal is $4,500, the interest rate is 4.5%, and repayment is expected in one and half yearsYou will receive Type your answer here from the lender .
Assume that you start with a balance of $3900 on your credit card.During the first month you charge $400. During the second month you charge $650 and make a payment of $280. Assume that your credit card charges a 29% APR and each month you make the minimum payment of 2.5% of the balance. Complete the following table. Round your answer to the nearest cent. Month 1 Previous balance- $3900 Finance charge- $94.25 Purchase- 400 Payment ?97.50 New balance? Month 2 Previous balance- finance charge- purchase- payments- New balance
Assume that you start with a balance of $3900 on your credit card. During the first month, you charge $400, and during the second month, you charge $650. Assume that your credit card charges a 27% APR and that each month you make only the minimum payment of 2.5% of the balance. Complete the following table. (Round your answers to the nearest cent.) Previous Balance Finance Charge(+) Purchases(+) Payments(-) New Balance Month 1 3900 Correct. 87.75 Correct. 400 Correct. 97.50Correct. 3890.25 incorrect. Month 2 3890.25 Incorrect. 87.52 Incorrect. 650 Correct. 97.25Incorrect. 3880.27Incorrect.
And the total interest someone will pay for the following scenarios
Please help me without using Excel.
Alexa takes out a loan of 94,000 at an annual effective discount rate of 6%. The loan is to be repaid with annual payments of 10,000. The first payment is due 4 years after the loan is taken out. Calculate the amount of the drop payment. Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answwer.
Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long. (Round your answers to the nearest cent.) $4000 balance, 14%, $2,500 payment (a) previous balance method $ (b) adjusted balance method $ (c) average daily balance method $ Need Help? Read It