You plan to borrow $45,000 at a 7.5% annual interest rate. The terms require you to amortize the loan with 7 equal end-of-year payments. How much will you be owing as at the beginning of third year down the time line of repayment.

Q: For how long will Markus have to make payments of $179 at the end of every year to repay a loan of…

A: Loan amount=$2130Annual payment=$179Interest rate=7%Compounding quarterly.

Q: You plan to borrow $300,000 at a 4% annual interest rate for your mortgage. The terms require you to…

A: Amortization of a loan refers to the repayment of the loan in equal instalments on a regular…

Q: You take out a 10-year installment loan for $220,000 and will make 40 quarterly payments of…

A: Amortization Table A document that details the monthly loan payment amount is known as an…

Q: You borrow $500,000 from a bank to buy a $600,000 building. You amortize the loan (annually) over 25…

A: Monthly payment refers to an amount that is paid every month for the repayment of a loan amount by…

Q: You take out a 30-year mortgage, at a nominal annual rate of X%, with monthly compounding. Each…

A: Nominal Interest Rate: It represents the rate of interest that does not take into consideration the…

Q: You to plan to borrow at 35000 at a 7.5 annual interest rate. The terms require you to authorize the…

A: To calculate the interest paid in year 2 of the loan, we can use the formula for calculating the…

Q: You plan to borrow $48,800 at a 6.5% annual interest rate. The terms require you to amortize the…

A: The objective of the question is to calculate the amount of interest paid in the second year of an…

Q: You take out a loan in the amount of $271,000 with annual equal repayments over the next 20 years.…

A: Annual Payment = P / ((1-(1+r)-n)/r) Where P = Principal Amount  r = Rate of interest n = Numbers…

Q: A borrower obtains a fully amortizing loan for $80,000 at 10 percent for 7 year. Payments are…

A: A mortgage is a loan that allows a buyer to acquire a house or other real estate property and repay…

Q: Tom is going to borrow $20000 at an interest rate of 5.25% p.a. calculated quarterly. Tom will make…

A: The interest rate that has been compounded over a certain period is the effective annual interest…

Q: You buy a house for $800,000.  It is a 20 Year mortgage where the payments are made quarterly and at…

A: Borrowings are the liability of the company which is used to finance the requirement of the funds.…

Q: As debt payment, P315,000 is due in 4 years and 7 months. If the debtor wishes to repay the debt…

A: Future value refers to the amount to be paid or received on a future date. The future value takes…

Q: You take out a 30-year mortgage, at a nominal annual rate of X%, with monthly compounding. Each…

A: An amortization schedule is a table or chart that displays the breakdown of periodic loan payments,…

Q: You borrow $5000 at 10% per year and will pay off the loan in 3 equal annual payments starting one…

A: Calculation of Payment at the end of Year 2:The interest payment is $348.94 and principal payment is…

Q: Consider a home mortgage of $125,000 at a fixed APR of 12% for 30 years. a. Calculate the monthly…

A: Payment per period can be calculated using PMT function in excel.   PMT(rate, nper, pv, [fv],…

Q: A mortgage of $166,000 is to be repaid by making payments of $1061 at the end of each month. If…

A: A mortgage is a covered loan that is taken out for the purchase of a property with the property…

Q: A borrower obtains a partially amortizing constant payment mortgage loan for $75,000 at 24 percent…

A: Balloon Payment  Under Balloon payment a large amount of sum is to be paid at the end of loan term…

Q: You plan to take a 15-year mortgage in the amount of $400,000 to buy a home.  The bank charges 4%…

A: Given, Mortgage amount is $400,000 Rate is 4% term is 15 years

Q: Assume we have a $500,000 mortgage at a 3.5% original interest rate, 30-yearterm, and monthly…

A: Step 1:Calculation of monthly payment @ initial interest rateThis is what the formula looks like for…

Q: If you need a loan for $16000 and make a down payment of 5%, then finance the balance with a 3-year…

A: A loan indicates the sum borrowed to meet the specific personal or business needs. The loan is…

Q: A 30-year mortgage requires payments of $2,850.28 at the end of each month. If interest is 5.39%…

A: Compound = Monthly = 12Time = t = 30 * 12 = 360Payment = p = $2850.28Interest Rate = r = 5.39 / 12 %

Q: A fully amortizing mortgage is made for $112,000 at 6.5 percent interest. Required: If the monthly…

A: Mortagage amortization refers to the systematic repayment of loan and interest. Equal and regular…

Q: You entered into a 2-year mortgage for $500,000. The mortgage has a 9 percent interest rate…

A: Loan repayment is the process of reimbursement of loan periodically by the borrower of the loan to…

Q: A fully amortizing mortgage loan is made for $84,000 at 6 percent interest for 25 years. Payments…

A: A mortgage is a covered loan that is borrowed to purchase a property. The property in question acts…

Q: How much interest would you be paying in the 75th month?

A: Amortization is the process of repaying the loan over time. In an amortizing loan, a portion of each…

Q: You plan to borrow $46,400 at a 7.6% annual interest rate. The terms require you to amortize the…

A: Loans are paid by the equal annual payments and these payments carry the payment for interest and…

Q: You are purchasing a $79,500 house with monthly payments on a twenty-year note with interest at 6.8%…

A: Amortization Schedule For loans with flat payments, a loan amortisation schedule is a table that…

Q: floating rate mortgage loan is made for $100,000 for 30yrs at a start rate of 12% interest. The…

A: In this question principal at the end of year one would be the total mount paid in monthly…

Q: You take a small business (SBA) loan for $90,000. The current annual interest rate on SBA loans is…

A: Loan Amount = a = $90,000 Interest rate = 6%

Q: What is the monthly payment on a 30 year, $661,000 mortgage, with an interest rate of 3%, compunded…

A: A loan is a financial arrangement in which one or more people, companies, or other entities lend…

Q: You are loaned $300 at the end of years 1, 2, and 3. You pay this loan back with payments of X at…

A: Loan is the value which is borrowed from the sources like bank and pay it later with extra amount…

Q: A mortgage of $26, 252.00 is to be repaid by making payments of $ 1368.00 at the end of each year.…

A: A mortgage is a covered loan that is taken out for the purchase of a property with the property…

Q: Assume you take a loan of $10,000 with interest of 5%/year compounded yearly. You intend to pay it…

A: First, determine the monthly payment of the loan using the Excel PMT function where the ‘RATE’ is…

Q: What is the principal portion of the 200th payment of a fully amortizing $250,000, 30-year fixed…

A: We can use the excell funtions that are explained below and get the answers for the above question…

Q: You have taken out a 20-year loan of $72,000 with 3% interest (APR) compounded monthly and with…

A: Annual percentage rate (APR) is a rate that a person is paying annually after undertaking all the…

Q: A mortgage of $152,000 is to be repaid by making payments of $847 at the end of each month. If…

A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…

Q: You plan to borrow $37,200 at a 7.2% annual interest rate. The terms require you to amortize the…

A: - Loan Amount = $37,200- Annual Interest rate = 7.20% per annum- Number of equal end of year loan…

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.