Purchase price -Initial payment = Balance due, (Po) +6% finance charge = 0.06 x 2 years x $7,500 = Total to be paid .. Monthly payments (A) = $8,400/24 $10,000 2,500 7,500 = 900 8,400 $350
Mortgages
A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
Mortgage
The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
The Fly-by-Night finance company advertises a “bargain 6%plan” for financing the purchase of automobiles. To the amount of the loan being financed, 6% is added for each year money is owed. This total is then divided by the number of months over which the payments are to be made, and the result is the amount of the monthly payments. For example, a woman purchases a $10,000 automobile under this plan and makes an initial cash payment of $2,500. She wishes to pay the $7,500 balance in 24 monthly payments: What effective annual rate of interest does she actually pay?
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