rianne borrowed $6200 to buy a vehicle to drive to school. She plans to study for 3 years, and then start her career using her education. Interest is charged on the loan at 7.64% compounded annually. If she starts making month-end payments of $230 when she

Q: A young engineer wishes to buy a house but can afford monthly payments of only $500. Thirty-year…

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: Annette wants a home improvement loan to renovate her kitchen. Her bank will charge her 3.6%,…

A: Loan is a value which is borrowed from external sources for a period and this amount is repaid later…

Q: Marta needs some quick cash for books at the beginning of spring semester, so she borrows $500 at 9%…

A: We can use the formula for simple interest:Simple interest = Principal × Rate × TimeHere, Principal…

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A: Down payment refers to the initial sum that is extended towards the purchase of something for which…

Q: Kim is trying to decide whether she can afford a loan she needs in order to go to chiropractic…

A: Debt Payments to income ratio (Without College Loan) = Debt/Net Income Debt Payments to income ratio…

Q: Kourtney currently works at Bruin Productions and decided to finally plan for the future, she wants…

A: The future value concept can be used to determine the future value of a present sum or the future…

Q: Crysta just borrowed $59,000.00. She plans to repay this loan by making a special payment of…

A: Annual payment refers to an amount that is paid annually for the repayment of a loan amount by the…

Q: Natasha is considering moving into a one-bedroom apartment in Winter Gardens. The apartment has a…

A: 1) Calculation of Application Fee:2) Calculation of Broker's Fee:

Q: Diane just graduated with a psychology degree. During college, Diane accumulated $12,000 in student…

A: Based on the given information, Interest rate = 8%/4 = 2% Number of periods = 5 years x 4 quarters =…

Q: Mason borrows $41,217.00 to buy a car. He will make monthly payments for 6 years. The car loan has…

A: Solution:- When an amount is borrowed, it can either be repaid as a lump sum payment or in…

Q: Dagmar has a 4-year car loan at an annual interest rate of 7.5%. She has made 26 payments of…

A: Total number of payment over the entire duration of loan = Number of years×Number of months in a…

Q: Kristina is going to finance new office equipment at a 5% rate over a 1.5 year term. If she can…

A: Using excel PV function

Q: ane needs $30,000  to buy a new car in four years. How much should she deposit at the endof each…

A: We will use the concept of time value of money here. The concept of time value of money states that…

Q: Ingrid wants to buy a $22,000 car in 6 years. How much money must she deposit at the end of each…

A: Future Value = $22,000 Time Period = 6 Years Interest Rate = 5.8%

Q: Jodi takes out a loan to buy a car for $29,000. If her monthly payment is $500 and the annual…

A: Using finance we need to find the NPER FIND NPERRATE = 8%/12PMT = 500PV =-29000FV =0 We will get…

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: Claudia intends to accumulate $35,000, so 6 months earlier she opens an account with $7,500, earning…

A: Simple interest = Principal * interest * time Amount = Principal + simple interest Amount =…

Q: Carol borrows $27,663 to help pay for expenses. The loan is for 7 years and carries an annual rate…

A: Amortization is a financial concept that refers to the gradual repayment of a debt, typically…

Q: Inez wants to borrow $2100 to start a small business.  She has found a bank that offers a 7% add on…

A: Calculation of Monthly Payment:The monthly payment is $47.25.Excel Spreadsheet:

Q: While Mary Corens was a student at the University of Tennessee, she borrowed $10,000 in student…

A: Tenure is the loan refers to the time period by which loan is repaid along with the applied interest…

Q: Callie won a grand prize of $40,000. She has decided to invest it today in an account from the…

A: The Present Value of Ordinary Annuity refers to the concept which gives out the discounted or…

Q: While Mary Corens was a student at the University of Tennessee, she borrowed $11,000 in student…

A: Present Value of annuity refers to the present value of all the future payments of and series of…

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: Katy has decided she wants to put money aside for a $8000 downpayment on a house. She figures she…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: Ali has decided to take a trip back home to California in 1 ½ years, but she needs to save up some…

A: Using excel FV function

Q: As soon as Erika graduated from college and got her first fulltime job, she decided she would start…

A: Monthly deposit (m) = $400 Monthly deposit period (p) = 120 (i.e. 10 years * 12) Monthly interest…

Q: Megan's dad is ready to lend her money at 4.9% interest per year for 3 years of college; however he…

A: Amount of a loan is the present value of payments to be made for the loan based on the time and…

Q: s a gross monthly income of $3,900. She has 15 remaining payments of $189 on a used car. The taxes…

A: TDS is the total debt ratio that is the ratio of the monthly housing payment plus other debt divided…

Q: Helen is buying a $12,375 car with a $3,000 down payment, followed by 36 months of $325. The down…

A: Price of car = $ 12,375 down payment = $ 3000 number of payments = 36 monthly payment = $ 325…

Q: Patty purchases a $190,000 house. She pays $50,000 down and takes out a 15-year mortgage with…

A: Mortgages A mortgage is a legal agreement between a lender and a borrower in which the borrower…

Q: Rebecca borrowed $20 400 from her local credit union to pay for the upgrades in her kitchen. She…

A: Interest on borrowed funds refers to the additional amount charged by a lender for the privilege of…

Q: Amy currently has $500 in an account with an annual rate of return of 4.3%. She wants to have $3000…

A: Here, Presnet value "PV" = $500 Future value for trip "FV" = $3000 Annual rate of return  = 4.3%…

Q: Sarah borrows some money to buy a new car. The car dealership allows her to defer payments for 12…

A: Monthly payment refers to an amount that is paid every month including interest and principal amount…

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.