Peg Gasperoni bought a $50,000 life insurance policy for $300 per year. Ryan Life Insurance Company sent her the following billing instructions along with a premium plan example: "Your insurance premium notice will be mailed to you in a few days. You may pay the entire premium in full without a finance charge or you may pay the premium in installments after a down payment and the balance in monthly installments of $75. The finance charge will be added to the unpaid balance. The finance charge is based on an annual percentage rate of 15%."   If the total policy premium is: And you put down: The balance subject to finance charge will be: The total number of monthly installments ($30 minimum) will be: The monthly installment before adding the finance charge will be: The total finance charge for all installments will be: And the total deferred payment price will be: $300 $75.00 $225.00 3 $75.00 $5.94 $305.94  400  95.00  305.00 5  75.00  9.91  409.91  500  120.00  380.00 6  75.00  15.21  515.21   Peg feels that the finance charge of $5.94 is in error. a. What is the actual finance charge for the first three months? (Round your answer to the nearest cent.)   b. Is she correct? multiple choice Yes No

Q: Karen owns a rental house in Ruston. Her policy requires the renter to make an initial deposit equal…

A: According to the information, the initial deposit is made on February 1, 2018 post which payments…

Q: Lorna deposited $1,600, at the beginning of every six months for 10 years, in an account at her…

A: Future value is a value of an investment or asset on a specific date in the future based on growth…

Q: Sarafina is making monthly payments into an annuity. She wants to have $600 in the fund to buy a new…

A: Monthly payment The minimum amount needed every month to be paid by an individual.

Q: On May 11, you get a 9% $1,800 furniture loan with monthly payments of $80.  Your first payment is…

A: The mortgage is the commitment to repay the sum borrowed as a loan secured by collateral. The loan…

Q: Allison wants to deposit $4,750 into a savings account. She has two different options, an account…

A: An interest advantage is considered beneficial for the party receiving the interest payments, as it…

Q: A patient's insurance policy states: Annual deductible: $300.00  Coinsurance: 70-30 This year the…

A: Insurance is one of the way to reduce or manage the risk by paying small amount periodically. Person…

Q: Luke borrows $200 000 from a bank to set up a medical practice. He agrees to pay a fixed interest…

A: Given: Loans = $200,000 Interest rate = 18.48% years = 10years

Q: Helen recently received a credit card with a nominal interest rate of 21 percent.  With the card,…

A: We can determine the time taken for Helen to repay back the loan by rearranging the PV of ordinary…

Q: Your child's orthodontist offers you two alternative payment plans. The first plan requires a $3,900…

A: TVM refers to the concept that considers the effect of money's interest-earning capacity, which…

Q: amika Harms needs $18,000 to prepare her web-page design business for opening. Her bank will loan…

A: the face value of a discount note. A discount note is a financial instrument used when someone…

Q: Your child's orthodontist offers you two alternative payment plans. The first plan requires a S…

A: TVM refers to the concept that considers the effect of money's interest-earning capacity, which…

Q: a) Assuming Shing had no new interest, determine Shing's minimum payment due on April 1, his billing…

A: The minimum payment that Shing has to make is the 1% of the outstanding principal and interest on…

Q: Donia borrowed $7000 from her credit union on a demand loan on July 20 to purchase a motorcycle. The…

A: The table format is already given in the question. And the solution does not require any theories or…

Q: ) the interest refund

A: When we buy goods on an installment basis we have to pay the purchase price in installments at…

Q: e borrows $200 000 from a bank to set up a medical practice. He agrees to pay a fixed interest rate…

A: Loans are paid by equal monthly payments that carry interest and loan payments.Given:Loans =…

Q: You are purchasing a lawnmower and the salesperson is trying to convince you to buy an extended…

A: Here, Cost of warranty Today is $500 Credit from sales person at the end of two years is 4100…

Q: On August 1, Rachael Westlake joined a Christmas Club. Her bank will automatically deduct $120 from…

A: The present value of the given annuity: The present value of the annuity due in the future is the…

Q: If you are trying to build credit by using a credit card, each time you make a purchase with the…

A: Interest Rate = 6% APR Previous Balance = $1,173 Calculation of Number of days between is as follow:…

Q: A career counselor decides to make monthly payments of $150 on credit card debt of $3,475.58 and…

A:

Q: Simon recently received a credit card with an 18% nominal interest rate. With the card, he purchased…

A: 1.

Q: Rose Daury loans Grace Josephs $500,000. Daury accepts a 5% note, which requires quarterly interest…

A:

Q: If Rita receives $36.44 interest for a deposit earning 6% simple interest for 10 days, what is the…

A: Interest received = $36.44 Interest rate = 0.06 or 6% Number of days = 10 Amount deposit = ?   In…

Q: A career counselor decides to make monthly payments of $150 on credit card debt of $3489.64 and…

A: The formula to calculate number of months is given below:

Q: Pandemic Bank charges 4% for discounting loans. If Super Tekla agrees to repay 3,000 in 6 months,…

A: we will only answer the first question, for the remianing questions, kindly resubmit the question…

Q: Donla borrowed $7,000 from her credit union on July 20 on a demand loan to buy the motorcycle.  The…

A: Here, Borrowed Amount is $7,000 Corrowed Date is 20th July Fixed Monthly Payment is $1,400 Floating…

Q: Huan accepted an in-store loan on a computer she just purchased. The monthly payment is $64.53 on…

A: Loan is an agreement between lender and borrower where lender provide borrower with funds in…

Q: Simon recently received a credit card with a 21% nominal interest rate. With the card, he purchased…

A: Loans are paid by equal fixed payments and these payments carry the payments for interest and…

Q: Julio buys a koi fish pond (and fish to put in it) for his wife on their anniversary. He pays $8,000…

A: Introduction Interest may be defined as those types of monetary payments which are made for…

Q: If Rita receives $36.44 interest for a deposit earning 6% simple interest for 10 days, what is the…

A: To calculate the deposit amount we will use the below formula   Deposit amount = I/(r*d/365) Where I…

Q: We have to calculate her monthly payment.

A: The process of determining a loan's equivalent monthly installment (EMI) based on the loan amount,…

Q: Rebecca carries a balance on her credit card each month. Today is the first day of the new. 28-day…

A: A credit card is a financial service offered by banks and other financial institutions to their…

Q: On August 19, Siobhan O’Sullivan started an ordinary annuity. She arranged to have $150 deducted…

A: Annuity refers to the fixed periodic payments which are paid monthly, quarterly, semi-annually or…

Q: A career counselor decides to make monthly payments of $150 on credit card debt of $3,496.55 and…

A: Required :To compute the number of fewer payments if monthly payments are increased to $200.

Q: Jason has a credit card with an APR of 29.5% and a current balance of $13,150.35. He wants to pay it…

A: APR = 29.5% Monthly interest rate (r) = 29.5%/12 = 2.45833333333333% Current balance (PV) = $…

Q: A career counselor decides to make monthly payments of $150 on credit card debt of $3,496.46 and…

A: Given:  Monthly payment =$150  Credit card debt = $3,496.46, Monthly Interest rate, r = 1.85%…

Q: rachel has a new credit card with an apr of 14.99% and a credit limit of $1600. the minimum monthly…

A: Data given: APR=14.99% Purchase =$250 Required: Rachels new balance at the end of the month.

Q: Janet borrows $3500 from a credit card company at 22.5% annually for 3 years. Determine Janet’s…

A: Borrowed amount (B) = $3500 r = 22.5% per annum = 1.875% per month n = 3 years = 36 months Let the…

Q: On August 1, Rachael Westlake joined a Christmas Club. Her bank will automatically deduct $105 from…

A: Monthly Deposit is $105 First Deposit starts on 1st August Closing of Account on 1st December…

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.