THE SHORTHOLDER BANK PAYS 5.60%, COMPUNDED DAILY (BASED ON 360 DAYS), ON A 9-MONTH CERTIFICATE OF DEPOSIT P20,000 YOU WOULD EXPECT TO EARN AROUND____ IN INTEREST

Q: Lucky Brand company has some of its jeans manufactured under a contract with an independent clothing…

A: Present value factor is computed as follows:-Present value factor = wherer= interest raten=time…

Q: A bank is offering to pay you $1000 at the beginning of each month for the next 10 years. The…

A: Payment per month (PMT) = $1,000Timing = BeginningAnnual interest rate is 6%. So, monthly interest…

Q: An investment pays $2,100 per year for the first 7 years, $4,200 per year for the next 7 years, and…

A: The discount rate is 8.20% compounding quarterly. The cash flows have a periodicity of 1 year.…

Q: Assume that you will need 60million shillings in your specialsaving account five years fromnow, to…

A: Future value is the value of current asset at a particular date in the future when it has earned…

Q: You have a student loan of 40,000$ that you want to repay in 10 years. Interest rates are at 6% per…

A: Since an amount is paid annually over the loan period, it is a type of annuity. The present value of…

Q: You are buying a house for $150,000.00 with a downpayment of $30,000.00. The loan will be paid back…

A: Mortgage loans make home buying quite easy because paid by equal fixed monthly payments that are…

Q: Comprehensive problem) You would like to have $52.000 in 16 years To accumulate this amount, you…

A: The FV of an investment refers to the combined value of its cash flows at a predetermined future…

Q: (Comprehensive problem) You would like to have $59,000 in 15 years. To accumulate this amount, you…

A: Annuity is the series of equal cash payments over the period.

Q: (Comprehensive problem) You would like to have $57,000 in 13 years. To accumulate this amount, you…

A: Here,ParticularsValuesFuture value (FV) $  57,000.00Number of years (NPER)13.00Interest rate…

Q: (Comprehensive problem) You would like to have $52,000 in 12 years. To accumulate this amount, you…

A: Future value = $52,000Period = 12 yearsInterest rate = 10% compounded annually

Q: You are buying a house for $130,000.00 with a downpayment of $26,000.00. The loan will be paid back…

A: Concluding payment is calculated as under-

Q: You are buying a house for $280,000.00 with a downpayment of $56,000.00. The loan will be paid back…

A: Loan amount = Cost of House - Downpayment To calculate the concluding amount of loan, excel formula…

Q: How much the monthly payment on a $135k home be if you get 3.6% interest over a 15 year loan with a…

A: Given information: Amount of loan : $135,000 Interest rate : 3.6% Time period : 15 years Balloon…

Q: Assume you are offered a $20,000 annual payment, made quarterly (m =4). Payments begin in 10 years…

A: Annual payment=$20000Quarterly payment=20000/4=$5000Discount rate=12%Growth rate=g=4%Deferred…

Q: 3 years from now you purchase aproperty, price is $1,800,000. you obtain 90% financing at a fixed…

A: Price of property = $ 1,800,000 Loan amount = Price of property*90%                       =…

Q: 18. You are borrowing $700,000 for 30 years at 6% annually. The lender is charging you a 2 point…

A: Effective interest rate simply means annual interest rate. It contrasts the interest rates of two…

Q: Assume you are offered a $20,000 annual payment, made quarterly (m =4). Payments begin in 10 years…

A: First Annual Payment: $20,000 (paid quarterly, for a total of $5,000 every quarter).Payment Start…

Q: Suppose you invest $210,000 in an annuity that returns constant annual payments over 6 years, with…

A: We will apply the concept of time value of money in this case.In an annuity you make an initial…

Q: (Complex present value) You would like to have $44,000 in 11 years. To accumulate this amount, you…

A: To Find: Annual deposits Lumpsum payments

Q: You're borrowing $6,000 for 4 Years with a stated simple interest annual interest rate of 8.5%. How…

A: Borrowings = p = $6,000Term = n = 4 yearsRate of interest = r = 8.5%

Q: You want to buy a new energy vehicles for ¥715,00 on a 5-year mortgage with annual payment at 7%…

A: In equal annual principal payment method, the loan is repaid in equal principle instalments.…

Q: Calculate the future value of $9,000 invested (single amount) for ten years in an account with an…

A: Information Provided: Present amount = $9000 APR = 6.3% Period of investment = 10 years   NOTE:…

Q: Teal and Associates needs to borrow $35,000. The best loan they can find is one at 12% that must be…

A: Monthly payment for the loan comprise of an interest part and principal repayment part and is…

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.