You decided to purchase a new appliance by borrowing $1,500 using Home Credit Product Loan which charges 18% compounded monthly. ***a. What are the monthly payments if the loan needs to be repaid in 3 years?

Q: You would like to buy a new car and will need to borrow $25,000 to do so. Your loan will be repaid…

A: EMI or monthly payment of loans is the payment which the borrower makes every month towards loan…

Q: Suppose that you decide to borrow 16000 for a new car. You can select one of the following loans…

A: Loan A has a term of 3 years with 6.3% interest.The formula to calculate monthly payment is given…

Q: You want to borrow $25,000 to buy a new car. Your annual interest rate is 6.2% over 4 years with…

A: Given: Loan borrowed = $25,000 Interest rate = 6.2% years = 4

Q: What is the payoff amount for the loan?

A: Present value illustrates the current value of a sum of money that will be received or paid in the…

Q: You need a $6000 loan to buy a used car.  Your bank offers a 4-year loan at 9% APR. Calculate your…

A: We have to use the following formula of the monthly payment by using the following formula: Monthly…

Q: over 4 years with monthly payments. Calculate your monthly payment.

A: Information Provided: Amount borrowed = $15,000 Interest rate = 3.3% Term = 4 years or 48 months

Q: In order to buy a car, you borrow $30,000 from a friend at 8%/year compounded monthly for 4 years.…

A: Loan amount (PV) = $ 30,000 Interest rate = 8% Monthly interest rate (r) = 8%/12 =…

Q: You want to buy a new car. You can afford payments of $250 per month and can borrow the money at an…

A: The term mortgage refers to a type of loan that is for the long term, and it usually has the asset…

Q: You borrow $18826 to buy a car. You will have to repay this loan by making equal monthly payments…

A: Borrowed amount is $18826 Time period is 5 years APR is 12% To Find: Monthly payment

Q: A customer of your bank comes for a car loan 10000 OMR. He is charged with an interest rate of 5%…

A: Fixed monthly payment =P× r ×(1+r)n(1+r)n-1 Where : P = Loan amount r = monthly rate of interest n =…

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: A customer of your bank comes for a car loan 10000 OMR. He is charged with an interest rate of 5%…

A: Given Information : Amount of loan : 10,000 OMR Interest rate : 5% annual Tenure : 12 months

Q: ou want to buy a new car. You can afford payments of $400 per month and can borrow the money at an…

A: Using excel PV function

Q: You decide that you can spend 600 as a monthly payment for a new car. Your bank offers car loans at…

A: The amount that can be borrowed should equal the present value of future payments. This is based on…

Q: You take out a 14-year personal loan for $13000 at rate of 8.1% which compounds 4 times per year.…

A: A loan refers to a contract where a borrower is provided money by the lender on the promise of…

Q: You are planning on buying a new car. You need to finance $32,500 for the purchase. The bank will…

A: Present value of annuity is computed by following formula:-PV = A*wherePV = Present value of…

Q: You want to buy a new car. You can afford payments of $425 per month and can borrow the money at an…

A: The objective of this question is to find out the total amount that can be borrowed given the…

Q: You purchase a home and secure a 30 year equal payment loan for $200,000 at a interest rate of 5.25%…

A: The number of months to stay will be around 6 months.

Q: You have decided to purchase a new car that costs $44,500. You need to make a 20% down payment, then…

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

Q: The terms of a loan call for monthly payments for 6 years at 9.6 percent interest. If you borrow…

A: The present Value of Ordinary Annuity refers to the concept which dictates today's value of a sum of…

Q: You want to buy a car with a local bank that will lend you $20000. The loan will fully amortized…

A: The amortized loan is a loan that repays with regular installments. The monthly payments of a loan…

Q: You have decided to buy a car that costs $25,800. Since you do not have a big down payment, the…

A: We take loans to buy things that otherwise we cannot afford. The loan amount is repaid through fixed…

Q: You want to buy a new car. You can afford payments of $450 per month and can borrow the money at an…

A:

Q: You want to buy a new car. You can afford payments of $250 per month and can borrow the money at an…

A: The amount he would be able to borrow is calculated as the present value of the monthly payment he…

Q: You want to buy a new car. You can afford payments of $200 per month and can borrow the money at an…

A: EMI or monthly mortgage payments are the fixed amount paid by the borrower to the lender that…

Q: Suppose that you decide to borrow 13000 for a new car. You can select one of the following loans…

A: With the given information, we need to find the monthly payments and total interest for each of the…

Q: You decided to purchase a new appliance by borrowing $1,500 using Home Credit Product Loan which…

A: Loan amount (PV) = $1500 Interest rate = 18% Monthly interest rate (r) = 18%/12 = 1.50% Period = 3…

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.