You consider financing the purchase of a new $159,900 sports car from a local luxury car dealership. The loan specifications establish a three-year term and a 9.2 percent APR. The buyer is required to make monthly payments starting immediately after approval. What is the expected payment of this loan?

Q: A new set of kitchen equipment has a cost of $95,000 including installation. You are able to…

A: The objective of this question is to calculate the monthly mortgage payment for a new set of kitchen…

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: Example: In this exercise prepare an amortization schedule showing the payments for each loan. Joan…

A: PV = $20,000r = 7% / 2 = 0.07 / 2 = 0.035 (semiannual interest rate)n = 5 years * 2 = 10 payments

Q: You need to borrow $12,000 to buy a car, so you visit two banks and are given two alternatives. The…

A: Loan is a contract between lender and borrower where lender provide funds to borrower which repaid…

Q: After deciding to get a new car, you can either lease the car or purchase it with a three-year loan.…

A: A loan is a financial instrument that involves the lending of money by one or more individuals,…

Q: Consider the following two options proposed by an auto dealer: Option A: purchase the vehicle at the…

A: The time value of money is a concept in finance that takes into account the effect of compounding,…

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 need a 30 year fixed rate mortgage to buy a new home for $400,000. Your mortgage bank will lend…

A: Mortgage/ Borrowings Borrowings are the loan which is taken by the individual to meet its financial…

Q: a. Calculate your monthly payments on this mortgage. b. Construct the amortization schedule for the…

A: Amortization Schedule: It is a table containing details about each periodic payment. It includes…

Q: What monthly payment will be required for the individual to make if the car is financed over a…

A: Compound interest is the amount of interest paid on interest which will grow the interest on loans…

Q: If you buy a two-bedroom, one-bathroom condominium for $600,000 in Los Angeles, California to be…

A: The Annual Percentage Rate (APR) is a percentage that represents the yearly cost of borrowing money.…

Q: suppose that you decide to borrow $15,000 for a new car. you can select one of the following loans,…

A: a.Loan ALoan Amount (pv) = $15,000Interest Rate (rate) = 5.9%Time Period = 3 YearsNumber of Payments…

Q: You are looking to buy a $415,000.00 home in Haverhill. If Bank of America will give them a 15-year…

A: 1)  Loan Amount = 80% of 415,000 = $332,000.

Q: You plan to purchase a $290,000 house using a 30-year mortgage obtained from your local credit…

A: formula in the below table : Cell reference  ABCDEFGH11 B C D E F G H 22 INTEREST RATE =7.25%/12…

Q: A home purchaser need to borrow $500,000 to finance their new home. The buyer believes they will…

A: A borrower can acquire a sort of prepaid interest or fees known as a mortgage point, often referred…

Q: ou want to borrow $27,000 from your local bank to buy a new car. you can afford to make monthly…

A: The given problem can be solved using RATE function in excel. RATE function computes interest rate…

Q: You plan to purchase a $240,000 house using a 30-year mortgage obtained from your local credit…

A: We need to use PMT function in excel to calculate monthly payment to pay off mortgage loan.The…

Q: have an outstanding student loan with required payments of 550 per month for the next four years.…

A:

Q: You plan to purchase a $240,000 house using a 30-year mortgage obtained from your local credit…

A: Loan amortization is the process of repaying a loan over time with regular payments that cover both…

Q: You want to borrow $77,000 from your local bank to buy a new sailboat. You can afford to make…

A: Compound = Monthly = 12Present Value = pv = $77,000Monthly Payment = p = $1300Time = t = 78

Q: You purchase a home for $434,000 by making a down payment of 15% and financing the remaining amount…

A: A mortgage refers to a covered loan that is borrowed for the purchase of a property, which itself…

Q: You plan to obtain a $10000 loan from a furniture dealer at 10% annual interest rate that you will…

A: Annual loan payment is the repayment of loan annually for the period of loan, that includes interest…

Q: A buyer is considering purchasing a 10-acre parcel in Peoria, Arizona for economic development. The…

A: The concept of the time value of money states that the current worth of money is more than its value…

Q: You have an outstanding student loan with required payments of $600 per month for the next four…

A: The real interest rate, often called the effective annual return (EAR), is an important financial…

Q: finance your new SUV with an auto loan of $38,000. This loan will b d compounding) at a 4% annual…

A: Auto loan=$38000Monthly interest rate=r=0.33%Period 3 years=36 months

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.