You are considering purchasing a piece of industrial equipment from the U.S.A. that costs S30,000. You decide to make a down payment in the amount of $5,000 and to borrow the remainder from a local bank at an interest rate of 9%, compounded monthly. The loan is to be paid off in 36 monthly installments. What is the amount of the monthly payment?

You are considering purchasing a piece of industrial equipment from the U.S.A. that costs S30,000. You decide to make a down payment in the amount of $5,000 and to borrow the remainder from a local bank at an interest rate of 9%, compounded monthly. The loan is to be paid off in 36 monthly installments. What is the amount of the monthly payment?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

You have just purchased new goods worth 100,000 EUR from your supplier. Your supplier offers you to pay within 35 days. If you pay within the first 8 days, you get a discount of 1.2%. When would you pay? Why? What is the effective interest rate? Under which circumstances would you take the trade credit?
If you borrowed P250,000 from a bank payable for two years and 6 months at simplediscount rate, how much will you receive from the bank?
The price of a new car is $20000. Assume that an individual makes a down payment of 25% toward the purchase of the car and secures financing for the balance at a rate of 4.2% per year compounded monthly. What monthly payment will the individual be required to make if the car is financed over a period of 48 months? What will the individual pay in interest charges over the period of 48 months?
You are offered an add-on loan for $4,500 at 18% for 5 years. What is the monthly payment? What is the amount of interest? What is the true interest rate cost of this loan? If you could pay the same loan above at a compound rate: What would the monthly payment be? What would the amount of interest be? Prepare a monthly payment schedule for each loan above using Excel, and submit it. Suppose that you are only allowed to make a balloon payment to the principal of the compound interest loan. You have $1,000 to put down at the beginning of year three. How many payments will you save?
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You can obtain a loan of $200000 at a rate of 15 percent for two years. You have a choice of (i) paying the interest (15 percent) each year and the total principal at the end of the second year or (ii) amortising the loan, that is, paying interest (15 percent) and principal in equal payments each year. The loan is priced at par. a. What is the duration of the loan under both methods of payment? b. Explain the difference in the two results
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