Sally Johnson loaned a friend $10,000 at 15% interest, compounded annually. The loan will be paid in four equal end-of-year payments. Sally expects the inflation rate to be 3%. After taking inflation into account, what rate of return is Sally receiving on the loan? Compute your answer to the nearest 0.1%

Q: years. The interest rate is i(12) = 8.750%. What is the outstanding balance on the loan just after…

A: The time value of money recognizes the idea that the value of an amount of money today differs from…

Q: Sue obtains a one-year loan of $2,700 based on an interest rate of 10 percent compounded annually…

A: Compound = monthly = 12Time = t = 1 * 12 = 12Present Value = pv = $2700Interest rate = r = 10/12%

Q: Gabby is planning to buy a home.  She has some money for a down payment already saved.  She sees a…

A: Step 1). Monthly payment on the borrowing is calculated using following equation Monthly payment =…

Q: Kurt loans Randy $14000. Randy repays the loan by paying Kurt $4000 at the end of one year and $6000…

A: The Effective Interest Rate is the actual interest rate earned or paid on a financial instrument…

Q: Lauren and Serena each have 59-week loans. At the end of their terms, they each repay $3,800.…

A: The major difference between a simple interest rate & a compound rate is that the interest…

Q: Tara has just bought a house for $930,000 with a 30% down payment and a 70% mortgage loan for 20…

A: Purchase Price = 930,000 Down Payment = 930,000*30% = 279,000 Loan Amount = Purchase Price - Down…

Q: An investor wants to save money to purchase real estate. He buys an annuity with quarterly payments…

A: Here, Quarterly Payment is $163 Interest Rate (r) is 5.5% Compounding Period (m) is Quarterly i.e 4…

Q: Mia Sato purchased a new condominium for $225,000.  The bank required a $40,000 down payment.…

A: We need to use mortgage amortization formula below to calculate monthly payment of mortgage.PMT…

Q: Frank is lending $1,000 to Sarah for two years. Frank and Sarah agree that Frank should earn a real…

A: To determine the nominal rate of interest that Frank should charge Sarah, we need to account for the…

Q: A student graduates from college with 48000 in student loans with a 5.5% annual simple interest…

A: In the given question we require to calculate the amount of loan due after the first payment.…

Q: Mia Sato purchased a new condominium for $225,000.  The bank required a $40,000 down payment.…

A: The first step is to determine the amount of the loan. This is done by subtracting the down payment…

Q: Rosie is buying a car for $25,500; She is Scheduled to make 7 annual instalments. Given an interest…

A: Given that, Cost of car = $25,500 Number of instalments = 7 Interest rate = 8%

Q: How much does she still owe when there is 1 year left on the loan?

A: Interest is charged by the lender on the amount of loan taken. At the initiation of loan repayment,…

Q: A student graduates from college with $31,000 in student loans with a 5.6% annual simple interest…

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

Q: Angelina is buying a home for $208,000. She has a $37,000 down payment and the bank b offered her a…

A: Loans are paid by the monthly payments and these are equal monthly installments and these carry the…

Q: Theo wants to take out a loan. He takes out a loan for 15000 dollars at 3,7% quarterly interest,…

A: Given information,Loan amount: Interest rate: Payment per period: Total years: To calculate,Amount…

Q: Assume that you will borrow $400, 000 from a bank that charges 4.5 percent interest compounded…

A: Hi there, As per the Q&A honor code, It must be answered the first question when multiple…

Q: Zoey Bettincourt gets a $300,000 loan for a townhouse. She secures a 5/1 ARM at an initial interest…

A: Loan amount = $300,000 Initial interest rate = 2.75% Initial payment = $1,224.72 After 5 years,…

Q: Larry Davis borrows $87,000 at 11 percent interest toward the purchase of a home. His mortgage is…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: 4. Liam borrows $10,000 at an effective periodic rate of i. The loan will be paid back with 10…

A: In order to show the proof, we will have to use the converging series concept of siminishing…

Q: ou loaned your brother a substantial amount of money and are working out a payment system. You’ve…

A: The Person loaned your brother a substantial amount of money and are working out a payments system.…

Q: Tara has just bought a house for $930,000 with a 30% down payment and a 70% mortgage loan for 20…

A: Cost = $930000 downpayment = 30%*$930000 = $279000 Loan = $930000-$279000 = $651000 Monthly interest…

Q: offered her a 30-year fixed rate mortgage at 5.83%. What will be Angelina's monthly mortgage…

A: Information Provided: Home cost = $417,000 Down payment = $26,000 Interest rate = 5.83% Years = 30…

Q: Jeanette took out a loan from the bank today for X. She plans to repay this loan by making payments…

A: Present Value refers to the current value of the loan or mortgage amount if paid all at once on the…

Q: William borrows $22,000 to buy a car. He will repay the loan through 4 years of equal monthly…

A: Variables in the question:Loan amount=$22000N=4 yearsRate=4.5%Working Note#1:nper=4 years x 12=48…

Q: Implied interest rate and period Consider the case of the following annuities, and the need to…

A: Loans ar paid by equal periodic payments and these payments carry the payment for interest and…

Q: LaTisha owed $65,000 when she graduated from college. Suppose her 10-year loan had an APR of 4.5%…

A: The total interest spent on loan will be Total interest on loan =Monthly payment*number of periods…

Q: Beatrice takes out a 7 year loan of $5000. The interest rate is 4.5%. What are Beatrice's monthly…

A: In order to find the monthly payment one can use excel and in excel use PMT function.

Q: Find the monthly payment for each loan below. Remember to assume monthly compounding. 11. Sean and…

A: The value for the mortgage would be determined when a person has taken some loan and some periodic…

Q: Cassandra received a 30 year loan of $320,000 to purchase a house. The interest rate on the loan was…

A: The term "Amortization" refers to the process of repaying debt over time by making regular principal…

Q: Ciana wants to take out a $7,500 loan with a 5.3% APR. She can afford to pay $128 per month for loan…

A: The given payments are a form of annuity wherein an equal payment is made at eqaul intervals. The…

Q: Clark and Lana take a 30 you're home mortgage of $122,000 at 7.9%, compounded monthly. They make…

A: a. PMT FORMULA: PMT=p×rm1-1+rm-m×n where, r = rate of interest m = frequency of compounding n = no…