To pay for a farm, Berti has to make equal payments of P135,900.00 at the beginning of each six months for eight years. Find the cash price for the farm, if money is worth 11% compounded semi-annually. Solve the problem and show the solution.

Q: Jasmine won a prize: the right to receive 36 payments of $100 per month with the first payment one…

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

Q: Nina buys a piece of lot for P30,000 down payment and 8 deferred semi-annual payments of P 5,000…

A: Annuity: A contract between you and another party known as an annuity obligates the borrower to pay…

Q: Mr and Mrs Chong are considering two types of education saving for their children. Saving A requires…

A: Here, Details of Saving A: Deposit Amount is RM 500 at the end of each month Interest rate is 3%…

Q: An insurance settlement of $1.5 million must replace Trixie Eden's income for the next 35 years.…

A: Present value (PV) = $1,500,000 Interest rate = 7.5% Monthly interest rate (r) = 7.5%/12 = 0.625%…

Q: Johan recently received his annual performance bonus from his employer. He has set up an investment…

A: It is a case of two different annuities having different periodic deposits. It requires future value…

Q: how much will the three project payments be worth at the time of her retirement?

A: Introduction: The term future value of annuity can be defined as the value of payments at some…

Q: The Martinez family wants to save money to travel the world. They purchase an annuity with a monthly…

A: Annuity means finite no. of payments which are same in size and made in equal intervals. Person gets…

Q: Susan Orman wants to pay $1500 semiannually to her granddaughter for 10 years for helping her around…

A:

Q: Anna deposits at the beginning of every month of P1,500 into an annuity for 6 years. If she wishes…

A: In this we need to calculate present value factor monthly to get the interest rate.

Q: Jake paid 100,000 pesos as down payment for a farm. The remaining amount is to be settled by paying…

A: Time value of money (TVM) refers to the concept which proves that the value of money today is higher…

Q: Lee wants to receive $18,000 each year for the next 20 years. Assume a 4% rate compounded annually.…

A: Annual receipt (C) = $18,000 Interest rate (r) = 0.04 Period (n) = 20 Years Amount need to invest…

Q: Dottie wants to buy a 150,000 house and puts a down payment of 60,000. He makes monthly payments for…

A: Given:

Q: Benjamin borrows $50,000 from a lending institution for building a house. The lending institution…

A: The question is based on the concept of amortization of mortgage loans. A mortgage loan is paid back…

Q: b. Calculate the upfront amount that she should pay under the alternative payment agreement so that…

A: Equivalent value today is present value of both payments based on time and interest rate off money…

Q: PhP200,000 as downpayment for a farm. The remaining amount is to be settled by paying PhP16,200 at…

A: Interest - The fee paid for the right to borrow money is called interest. In contrast to how the…

Q: Peter was receiving rental payments of $2,000 at the end of each month from his tenants of his…

A: A perpetuity is like an annuity in which cash flows are streamed for an indefinite period of time.…

Q: Carlos buys a house for 1,200,000 pesos. He makes a 20% down payment and the balance he takes a loan…

A: Solution: amount of loan = 1,200,000 * 80% = 960,000 Nos of monthly periods =15*12 = 180 Monthly…

Q: determine if Elora would be able to buy the land

A: First we need to determine the effective annual interest rate using the formula below:

Q: Margarita borrows R10,000 from her uncle and agrees to repay it in monthly instalments of R200. Her…

A: Loans are paid in equal monthly payments and these payments carry the payment for interest and…

Q: Truman is saving up for a $7,000 trip to Fiji. If his bank account earns 5.8% compounded monthly and…

A: Final amount required = $7000 Interest rate = 5.8% per annum  Semiannual deposit (A) = $450 Let n =…

Q: Natalie’s RRSP is currently worth $250,000. She plans to contribute for another five years, and then…

A: Annuity refers to series of annual payment which is paid or received at start or ending of specific…

Q: When Gustavo and Serrana bought their home, they had a 5.9% loan with monthly payments of $870.60…

A: Time, the value of money refers to the concept used for estimating the future value of an asset…

Q: Cheska is saving for her dream cellphone. She deposits 2,000 pesos at the end of each month that…

A: Future Value refers to value of any current amount or flow of recurring payments at some future date…

Q: Michael bought a laptop and paid P12,000 down payment plus P10,000 at the end of each month for a…

A:

Q: William got a second loan for 78,000 dlls to be payable in 5 years with interest rate of 7.5 percent…

A: Loan amount (PV) = 78000 Period = 5 Years Number of monthly payments (N) = 5*12 = 60 Annual interest…

Q: Tristan will deposit $254 into an account every two weeks (26 times per year). The account earns an…

A: Future value refers to the value of a current asset at some future date using inflation or…

Q: Vanessa was supposed to make a payment of $3,500 in 2 years and another payment for $1,800 in 5…

A: Equivalent value today is the present value of both payments based on time and interest rate of…

Q: The newly married Brahmin plans to buy a dream house for 1.5 billion rupiah. the type of funding…

A: Compound = Monthly = 12Price of House = 1.5 Billion RupiahTime = t = 10 * 12 = 120Down Payment Rate…

Q: Deferred Annuity and Annuity Due To pay for a farm, Berti has to make equal payments of P135,900.00…

A: Annuity due is the series of equal payments that are made at the beginning of each of the period.…

Q: costs P500,400 cash. A purchaser will pay P100,000 cash, P50,000 at the end of 2 years and a…

A: In this we need to find out the present value of each and find the annual installment.

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.