Use the calculator at https://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx to calculate the monthly payment and the total interest someone will pay for the following scenarios: Suntrust Bank Monthly Payment (4.34% interest) Alliant Credit Union Total interest Monthly Payment (2.74% interest) Total interest paid paid $29,000 automobile with 10% deposit Monthly Payment (4.34% interest) Total interest Monthly Payment (2.74% interest) Total interest paid paid $29,000 automobile with $12,000 deposit

Q: How would an increase in the interest rate effect the present value of an annuity problem (all other…

A: Present value of the annuity The amount of money that would be required today to support a series of…

Q: c) Does every loan, which consists of an initial outlay followed by a sequence of re- ceipts, have a…

A: A loan can be defined as the financial support received from the lender by the borrower. In…

Q: Define Times interest earned ratio.

A: Accounting Ratios: A ratio is a number expressed in terms of anther. Ratios are used by…

Q: Create simple examples to illustrate the following concepts. i. Time value of money ii. Effective…

A: i) Time Value of Money: The concept of time value of money underlines that the value of money today…

Q: The formula in getting the compound interest given the present value and maturity value is…

A: Compound interest : Compound interest can be understood as the transfer of interest, or, in specific…

Q: Which of the following describes how to calculate abond’s issue price?Face Value Interest Paymentsa.…

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: What is the net present value of an annuity?

A: Net present value is defined as the temporal variation in the present value of cash inflows and…

Q: Give me the formula of net present value

A: Net Present Value of a project is equivalent to the difference between the present value of cash…

Q: ,Match the following terms with the appropriate definition.Effective yield or interest rateMonetary…

A: Eeffective yield or interest rate is a rate at which the amount invested actually grows over a…

Q: Which of the following cannot be calculated? Select one: a. the interest rate on perpetuity given…

A: Perpetuity is referred to as an annuity, which does not have an end or the stream of the cash…

Q: For any investment, which will always have the higher future value : an ordinary annuity or an…

A: There are two types of annuity which are as follows: Annuity due: In contrast of ordinary annuity,…

Q: What is Annual-payments option?

A: The annual payment option is the obligation to pay the amount to the receiver annual instead of the…

Q: Which of the following methods consider the time value of money? A. payback and accounting rate of…

A: Time Value of Money The time value of money is the concept that money you have now is worth more…

Q: Describe the process of using the risk-adjusted discount rateto calculate the net present value?

A: Net present value (NPV) is the excess of present value of cash inflows over the present value of…

Q: How can we determine the Net Present-Worth Amounts at Varying Interest Rates?

A: Answer: Net present worth is an estimation method applied to various time intervals when cash flows…

Q: Give an example assuming that  the Compounding Period equals to Payment Period?

A: The representation on the basis of assumption:

Q: What is the initial investment plus interest?

A: The total of initial investment and interest will give the total value or worth of the investment…

Q: How can we calculate the net present worth of each payment?

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: When considering several possible investments, why are rates of return preferable than monetary…

A: The return, often called a financial return, is the sum of money wasted or earned on an investment…

Q: The value of the interest rate depends on the ------ of the time period. Select one: a. length b.…

A: The interest rate value is influenced by factors such as inflation, creditworthiness, loan amount,…

Q: When is a project in Need for an External Interest Rate?

A: When net cash flow that is generated by the project during the project’s life is reinvested, then…

Q: Give an interesting feature of any perpetual annuity?

A: Interesting feature of any perpetual annuity: The feature of perpetual annuity is that, a stream of…

Q: Derive the formula

A: Future worth or Future value refers to the value of current asset at some future point of time on a…

Q: Select all of the time value of money factors that are known in a NPV assessment O Present value of…

A: npv : IT IS THE DIFFERENCE BETWEEN PRESENT VALUE OF CASH INFLOW AND PRESENT VALUE OF CASHOUTFLOW.

Q: Illustrate the market interest rate to find the net present worth?

A: Investors frequently find the present worth of the fund flows for the reason that savers receive the…

Q: What is the internal rate of return? How is it used? How does it relate to the concept of compound…

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: Define future value of a single amount.

A: Time value of money: Time value of money refers to the concept that the value of money available at…

Q: How is the present value of an annuity determined?

A: Present value:   Present value is the value of future cash flow today. Present value is the…

Q: What is future value of annuity, FVA?

A: The concept that helps to evaluate the future or present value of the cash flow is term as the time…

Q: What is the interest rate the borrower will pay after the first rate adjustment?

A: Data given: Start rate = 3.50% Maximum cap for the first year=3% MTA index at the end of the first…

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.