You lend a friend $50,000. Your friend will repay you in 6 equal annual end-of-year payments of $12,000. You will receive the first paym one year from now. What rate of return does your loan earn? 14.86% 12.50% 11.53% 6.00%

Q: Find the monthly payment for the loan. (Round your answer to the nearest cent.) A $501,000 home…

A: Loan amount (P) = $400,800 (i.e. $501,000 * 0.80)Monthly interest rate (r) = 0.00483333333333333…

Q: You borrow $11,000 over a 5-year term. The loan is structured as an amortized loan with annual…

A: Loan installment is that which is paid by borrower to lender for a specified period of time. This…

Q: You want to buy a $199,000 home. You plan to pay 10% as a down payment, and take out a 30 year loan…

A: Formula; Loan amount = Home value * (1 - Down payment)   Loan amount = $199,000 * (1 - 0.10) Loan…

Q: You borrowed $650,000 from a bank at an interest rate of 63% compounded quarterly to purchase a new…

A: Monthly payments can be calculated by present value of annuity as the money borrowed (Loan) is the…

Q: You owe $24,000 on student loans at an interest rate of 5.45% compounded monthly. You want to pay…

A: Given loan amount is Interest Rate is Time period since number of payments is monthly total number…

Q: Mrs Shiirley Abundo borrowed 20, 000.00 at 7.5% compounded quarterly at a certain cooperative. How…

A: Here, Borrowed Amount is 20,000 Interest Rate is 7.5% Time Period is 2 year Compounding Period is…

Q: You borrow $560,000 to purchase a home. The loan rate is 8.95% and must be repaid in 27 years. What…

A: Compound = Monthly = 12Present Value of Payment = pv = $560,000Interest Rate = r = 8.95 / 12%Time =…

Q: You deposit $725 today in a savings account that pays 6% interest, compounded annually. How much…

A: Future value, or FV for short, is a term used in finance to describe the estimated monetary value of…

Q: Assuming an interest rate of 6.88% compute how much income you will have each month if you save $500…

A: A fixed amount of money paid to an individual throughout, without any end is known as an annuity.…

Q: Straight bank loan. Right Bank offers EAR loans of 8.74% and requires a monthly payment on all…

A: Monthly payment formula: PMT = principal ×aprm1-1+aprm-m×n where, m = frequency of compounding n =…

Q: A growing annuity pays $1,000 at the end of the second year (t=2). The payment grows 3% per year…

A: Payment after second year = $1000 Number of payments = 5 Growth rate = 3% Discount rate = 8%

Q: If you borrow $6,000 for 4 years and agree to pay back $8000, what simple interest rate will you end…

A: Simple interest is the type of interest that is calculated only on the principal amount. Simple…

Q: If you deposit $20,000 per year for 18 years (each deposit is made at the beginning of each year) in…

A:

Q: What amount today

A: Step 1: Given Value for Calculation Future Value = fv = $100Time = t = 1 YearsOpportunity Cost = r =…

Q: Suppose you have $2,200 and plan to purchase a 10-year certificate of deposit (CD) that pays 10.9%…

A: b. $6,190.68 Explanation:We can calculate the future value of the CD using the compound interest…

Q: You want to buy a house and will need to borrow $175.000 The interest rate on your loan is 4.93…

A: PMT is often used in financial formulae relating to loans, mortgages, annuities, and other financial…

Q: For $5,000, you can purchase an ordinary annuity that will pay you $920.23 each year for 8 years.…

A: The annuity is the periodic payment received in each period. The present value is the discounted…

Q: How much will you owe at the end of 10 years and a month, if you decide to pay your yearly bonus at…

A: Here, Loan Amount$355,000.00Time Period in years15APR5.50%Compounding Period (Weekly)52Yearly Bonus…

Q: Which expression best calculates your monthly payment for a $10,000 conventional loan that you…

A: Compound = n = Monthly = 12Present Value = pv = $10,000Annual Interest Rate = r = 4%Time = t = 5…

Q: 1. A $200 loan is offered with an annual simple interest rate of 6 percent. How much would the…

A: Amount payable = Loan *(1+ interest rate* time period)

Q: Waiting for Answer

A: Step 1: Given Value for Calculation  Future Value = fv = $100Time = t = 1 YearsOpportunity Cost = c…

Q: $7,763     You found out that now you are going to receive payments of $7,000 for the next 14 years.…

A: Present value of annuities will includes the amount that is equivalent today based on the interest…

Q: How much will you owe at the end of 10 years and a month, if you decide to pay your yearly bonus at…

A: Here, Loan Amount$355,000.00Time Period in years15APR5.50%Compounding Period (Weekly)52Yearly Bonus…

Q: (d) Repeat the process with the loan split into two 3 year loans. Round to the nearest dollar. End…

A: Future Value refers to the value of present value of annuity after a given period of time period…

Q: Suppose you borrowed $45,000 at a rate of 8.4% and must repay it in 5 equal installments at the end…

A: First we will calculate the amount of installment with the help of following formula Installment =…

Q: If you lend $3000 to a friend for 15 months at 8% annual simple interest, find the future value of…

A: Futre value of loan is calculated as follws:-FV= A+IwhereFV= future value of loanA= Amount of loan I…

Q: payments with the first payment being made at the end of this year. If the payments are to grow by…

A: This is present value of growing of annuity problem can be solved using formula.Loan…

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: calculate how much you would have in a savings account 5 $1,000 today, given that the interest paid…

A: Future value is the amount that was deposited and amount of interest accumulated over the period of…

Q: You want to buy a car and therefore you borrowed $10,000 from a bank today for 6 years. The nominal…

A: Monthly Payment: It is the amount that is paid at the end of each month to the lender of the bond by…

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.