Tom is going to borrow $20000 at an interest rate of 5.25% p.a. calculated quarterly. Tom will make end-of-month repayments for 2 years. The effective rate for this loan is Reff 0.0043559977 What will be Tom's monthly payment amount? Give your answer to the nearest penny.

Q: Mr. Bean wants to borrow $9,400 for three years. The interest rate is 7.4% compounded monthly. a.…

A: Payments on loan refer to the scheduled amounts of money that a borrower must pay back to a lender…

Q: You receive a 10-year subsidized student loan of $22,000 at an annual interest rate of 4.3%. What…

A: Using excel PMT function to calculate monthly payment.

Q: Use the monthly payment formula to answer the question. Round your answer to two decimal places, if…

A: Purchase Price = $648,000Down Payment rate = 10%Compound = monthly = 12Interest rate = r = 7.92 / 12…

Q: You are purchasing a house and you are considering getting a fixed-rate mortgage (FRM) for $750,000.…

A: Required monthly payments for the mortgage is calculated using excel PMT function Required monthly…

Q: You take out a 10-year installment loan for $220,000 and will make 40 quarterly payments of…

A: Amortization Table A document that details the monthly loan payment amount is known as an…

Q: What size mortgage can you afford if you can make a monthly payment of $1,200 per month for 30…

A: Mortgage we can afford is present value of monthly payments

Q: You to plan to borrow at 35000 at a 7.5 annual interest rate. The terms require you to authorize the…

A: To calculate the interest paid in year 2 of the loan, we can use the formula for calculating the…

Q: You plan to borrow $49,400 at a 7.3% annual interest rate. The terms require you to amortize the…

A: Yearly installments= $49400* R* (1+R)^n/((1+R)^N-1) = 49400* 7.3%* (1+7.3%)^7/((1+7.3%)^7-1) = 9262

Q: Juliana is taking out an $8,700, 3year loan with an APR of 2.31%. What will be the monthly payment…

A: Monthly payment is refer as the regualr amount of fund or payments at monthly time interval. It is…

Q: Timothy Lawrence plans to borrow $5,000 and to repay it in 36 monthly installments. This loan is…

A: The add-on interest rate method is a way of calculating interest in which the interest is calculated…

Q: A borrower obtains a fully amortizing loan for $80,000 at 10 percent for 7 year. Payments are…

A: A mortgage is a loan that allows a buyer to acquire a house or other real estate property and repay…

Q: Suppose you take out a mortgage for $170000 at 3.12% interest, compounded monthly, for 15 years.…

A: Monthly payment refers to an amount that is being paid every month for the repayment of the loan…

Q: Connie wants to have an annuity payment of $2000 at the end of every three months. How much should…

A: Given information: Annuity payment is $2,000 Interest rate is 6% compounded quarterly Number of…

Q: John takes out a 5 year loan for $10000 at 8% interest compounded monthly. Calculate his monthly…

A: The annuity is an amount that is paid back to the loan amount which consists of interest payments…

Q: Calculate the annual payments for a $15,644 loan that you will repay over 5 years. The bank gives…

A: Annual payments (P) on a loan (PV) of amount $15,644 with an interest rate ( r ) of 6.6% and with 5…

Q: You plan to take a 15-year mortgage in the amount of $400,000 to buy a home.  The bank charges 4%…

A: Given, Mortgage amount is $400,000 Rate is 4% term is 15 years

Q: If you need a loan for $16000 and make a down payment of 5%, then finance the balance with a 3-year…

A: A loan indicates the sum borrowed to meet the specific personal or business needs. The loan is…

Q: You borrow $8000 to help pay your college expenses. You agree to repay the loan at the end of 8…

A: From the given information, Principal (P) = $8000 Time (t) = 8 years r = 8% = 0.08 Compounded…

Q: You have a balance of $8,000 on your credit card.  The interest rate is 19% per year.  You want to…

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

Q: You have just taken out a $16,000 car loan with a 8% APR, compounded monthly. The loan is for five…

A: Payment per period can be calculated using PMT function in excel.   PMT(rate, nper, pv, [fv],…

Q: Mr. Bean wants to borrow $8,200 for three years. The Interest rate Is 5.5% compounded monthly. a.…

A: Annuity refers to the amount of payment which is made at equal intervals for certain period or till…

Q: you are taking a $100,000 mortgage loan for your business to be repaid over 5 years in equal…

A: Mortgage loan is the loan which is given by keeping something as collateral. This loan is for…

Q: You plan to borrow $47,800 at an 8.5% annual interest rate. The terms require you to amortize the…

A: Loan amount (PV) = $ 47800 Interest rate (r) = 8.5% Number of annual payments (n) = 7

Q: A borrower is making a choice between a mortgage with monthly payments or biweekly payments. The…

A: Periodic payment refers to an amount that is paid by the borrower to the lender including the…

Q: is 4% per annum compounded semi-annually? State your answer in years and months (from 0 to 11 He…

A: Loan amount=$3340Annual payment=$116Interest rate=4%Compounding semi annual.

Q: Nancy takes out a $500,000 loan for 25 years at 4% monthly.  a) What is the monthly payment? b) What…

A: in this we have to calculate present value FACTOR and calculate monthly payments.

Q: Mr. Gordon plans to invest $400 at the end of each month in an account that pays 6%, compounded…

A: V = Future value = $ 30,000         c = Periodic  deposit = $ 400         r = rate of interest…

Q: Cornelia will borrow $300,000 from the bank as a mortgage on her new home. The posted rate is an APR…

A: APR or annual percentage rate is the interest rate per year without taking into the compounding…

Q: Calculate the monthly mortgage payments under the following conditions: $325,000 mortgage, 3.125%…

A: Here, Mortgage Amount is $325,000 Interest Rate is 3.125% Time Duration is 30 years

Q: Angus can obtain a residential mortgage loan from a bank at 7.00% compounded monthly. What is the…

A: given information interest rate = 7% = 0.07 compounded monthly  time period = 1 year

Q: You take out a 30-year fixed-rate mortgage for $300,000 with an interest rate of 1.2% (APR). What is…

A: Present value of annuity is computed as follows:-PV = A*wherePV =present value of annuityr= interest…

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.