3. To buy a computer, Tom borrowed P30,000 at 9% simple interest calculated yearly. If he will be making monthly payments for four years, calculate: a. The amount of interest paid over the 4 years, b. The total amount to be paid back, c. The monthly payment amount.

3. To buy a computer, Tom borrowed P30,000 at 9% simple interest calculated yearly. If he will be making monthly payments for four years, calculate: a. The amount of interest paid over the 4 years, b. The total amount to be paid back, c. The monthly payment amount.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

See similar textbooks

Related questions

Q: Supposed you want to buy a used car but your savings is not enough. To do this, you borrow P60,000…

A: Loan amortization is the process of scheduling out a fixed-interest rate loan into scheduled…

Q: Suppose on January 1 you deposit $1000 in an account that pays a nominal, or quoted, interest rate…

A: Future value is the value of an asset that grows after a specific period of time. The future value…

Q: If you borrow $3,600 to buy a car at 12% per year compounded monthly, to be repaid over the next…

A: Answer Borrowing amount = $3,600 Interest rate = 12% per year Interest rate monthly = 1% Time…

Q: You borrow $10,000 from a bank for three years at an annual interest rate, or annual percentage rate…

A: The rate that is charged at an annual basis on the borrowing funds as well as earned annually on…

Q: Today, a businessman borrowed money to be paid in 10 equal quarterly payments starting at the end 2…

A: The amount borrowed can be calculated as the present value of quarterly payments, The present value…

Q: John Perez receives P 90,000.00 credit for his old automobile when buying a new model costing P…

A: The question can be solved as follows:

Q: Today, a businessman borrowed money to be paid in 10 equal quarterly payments starting at the end 2…

A: Quarterly payment (P) = P 2000 Annual interest rate = 10% Quarterly interest rate (r) = 10%/4 =…

Q: An engineer plans to borrow $100,000 to open his own consulting business. He must repay $2,150 a…

A: using financial calculator, N = 5*12 =60 PMT = -2150 PV= 100,000 FV = 0

Q: Mr. Samal deposits 5,000 php at the end of each month at a product with an interest rate of 8%…

A: In the given question, compounding is done on monthly basis. Therefore, effective monthly rate will…

Q: 1.) To pay for your education, you’ve taken out RM25,000 in student loans. If you make monthly…

A: Present Value of Ordinary Annuity refers to a concept that determines the value of cash flows at…

Q: You decide to buy a house costing $6,000,000. You pay $1,000,000 down, and the remainder will be…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: You decide to buy a house costing $6,000,000. You pay $1,000,000 down, and the remainder will be…

A: Here, Value of House is $6,000,000 Down Payment is $1,000,000 Therefore, Loan Amount (PV) is:…

Q: In order to buy a car, you borrow $25,000 from a friend at 12%/year compounded monthly for 4 years.…

A: a.

Q: 1. Jeremiah has 3 years to repay a $55000 personal loan at 6.55% per year, compounded monthly. a.…

A: Solution:- When an amount is borrowed, it can either be repaid as a lump sum payment or in…

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: 1. A man has a loan of 50,000 in a bank that gives 12% simple interest. How much is the interest if…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Columbia Corporation deposited $2,000 in an account that pays 12% interest annually. If the interest…

A: Continuous compounding of an amount of $2,000 at an interest rate of 12% and for a period of 20…

Q: f Brian wants to buy a house that cost $100000 the bank agreed to give him 80% of cost at 0.07…

A: Installment is the amount of periodic payments a borrower has to make to its lender in order to pay…

Q: If Phil borrows $40,000 from a loan company at an interest rate of 6.5% per year compounded weekly,…

A: Here, Loan amount = $40,000 Quarterly payment of the loan = $800 Interest rate = 6.5% compounded…

Q: You want to buy a car, and a local bank will lend you $10,000. The loan would be fully amortized…

A: "Hi, As you posted multiple questions, we will answer the first question for you as per guidelines.…

Q: Suppose you want to have $700,000 for retirement in 25years. Your account earns 9% interest. a) How…

A: In this we need to calculate the future value factor monthly and than calculate the monthly payment…

Q: 4. You wish to purchase a house that costs $294,000, and the bank requires you to have 12% of the…

A: A down payment is an early stage payment made for a particular good purchased through financing.

Q: To save up for your dream business, you committed to deposit P2,000, starting today, every month in…

A: Present value (PV)= P2,000 Interest rate (r)= 6% Number of period (n)= 5 Future value (FV)

Q: Solve Problem 20.11 using Excel.

A: Loans refer to the amount that is borrowed on credit by the individual or the company from the banks…

Q: A young executive deposits $400 at the end of each month for 4 years into an account that earns 6%…

A: Formulas:

Q: Mr Teo wants to buy a house. His annual income is $48,000. The bank is willing to lend an amount…

A: As your question contains multiple subparts, we would be answering first three only. To get the…

Q: b. You have a $20,000 note payable which is due in three years. How much money must you put into a…

A: Solution d: N = 1 PV (Future value of at the end of 3 years) = $20,000 Interest rate (I) = 3%

Q: Charlie takes out a loan for $5,000 with an annual simple interest rate of 12%. How much interest…

A: Interest = Principal * rate * time Principal = $5000 rate = 12% time = 4 years

Q: Today, a businessman borrowed money to be paid in 10 equal quarterly payments starting at the end 2…

A: The amount borrowed can be calculated with the help of present value of annuity function. The…

Q: Assume that you have purchased a new car and after your down payment, you borrowed $10,000 from a…

A: Monthly payment can be calculated using the present vale of annuity formula. Present value of…

Q: Suppose an investor deposits $28,000 into a savings account for 4 years at 6.75% interest. Find the…

A: Dear student as per answering guideline we can answer only three sub parts if a question have more…

Q: Please use formula in solving. You are interested in buying a house worth P1,200,000. You paid…

A: Since you have asked a question with multiple parts, we will solve the first 3 parts for you. Please…

Q: Mr. Jimin borrowed money to CBA Bank for $211,000 for business development the chicken farm. The…

A: Given, Loan Amount - 211,000 Interest rate = 9% (compounded monthly) Period - 12 years

Q: A man is paying 100,000 at the beginning of each month at a rate of 12% compounded monthly. If the…

A: Present Value of Annuity due refers to the value today of the series of the predetermined amount of…

Q: Suppose that you buy a car costing $14,000. You agree to make payments at the end of each monthly…

A: The payments made to purchase this car is a form of an annuity. Thus, the value of each payment can…

Q: You make a down payment of $1,500 to purchase a used car worth $5,500.00 cash price and finance the…

A: Time value concept Receiving the value today is of more value than that of receiving the same amount…

Q: payment

A: Monthly payments are nothing but the payment which has to be made by the borrower every month. The…

Q: 2: An engineer wishes to purchase an $80 ayment of $20 000 and borrowing the remaining $60 000,…

A: In this question payment per month needs to be find out. Loan amount is $60,000 and it is to be paid…

Q: nd l

A: Present Value of annuity due formula will be used to calculate the value of house and lot as the…

Q: A borrower had a loan of $70,000.00 at 6% compounded annually, with 8 annual payments. Suppose the…

A: The question is based on the concept of Loan & Amortization.

Q: The Clarks are arranging a $90,000 mortgage loan from their bank. The mortgage is to be amortized by…

A: Borrowings are the liability that is used to finance the requirement of the funds. The borrower…

Q: Brendon Walsh wants to borrow $30,000 from the bank. The interest rate is 6% and the term is for 5…

A: A loan is an agreement between two parties where an amount is exchanged in return for future…

Q: You borrowed $600,000 from a bank at an interest rate of 70% compounded quarterly to purchase a new…

A: A loan is an amount borrowed by one person from another person at a pre-determined interest rate.…

Q: You have accepted a loan in an amount of $15,000 for your new car. You have agreed to pay the loan…

A: Here, Loan Amount is $15,000 Time Period is 4 years Interest Rate is : 9% 6% 7% 8% Compounding…

Q: Barbara wants to accumulate $25000 by the end of 4 years. She starts making quarterly deposits in…

A: We need to use this equation for quarterly payment(PMT) and future value(FV) of annuity PMT…

Q: 4. Cloy availed a cash loan that gave him an option to pay P10,000 monthly for one year. The first…

A: PV annuity due=C×((1-(1+i)^(-n))/i)×(1+i)C=Cash flow per period i=Interest raten=Number of payments…

Q: Hamilton wants to accumulate ₺ 100.000 at the end of 4 years. It starts quarterly payments in a bank…

Concept explainers

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.

Question

Simple Interest: Solve for the following with solution

3. To buy a computer, Tom borrowed P30,000 at 9% simple interest calculated yearly. If he will be making monthly
payments for four years, calculate:
a. The amount of interest paid over the 4 years,
b. The total amount to be paid back,
c. The monthly payment amount.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: INTRODUCTION

Step 2: Part a

Step 3: Part b

Step 4: Part c

Trending now

This is a popular solution!

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $2,500 over the next 4 years when the interest rate is 15%, how much do you need to deposit in the account? B. If you place $6,200 in a savings account, how much will you have at the end of 7 years with a 12% interest rate? C. You invest $8,000 per year for 10 years at 12% interest, how much will you have at the end of 10 years? D. You win the lottery and can either receive $750,000 as a lump sum or $50,000 per year for 20 years. Assuming you can earn 8% interest, which do you recommend and why?
Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
Samuel Ames owes 20,000 to a friend. He wants to know how much he would have to pay if he paid the debt in 3 annual installments at the end of each year, which would include interest at 14%. Draw a time line for the problem. Indicate what table to use. Look up the table value and place it in a brief formula. Solve.
Suppose that you buy a car costing $14,000. You agree to make payments at the end of each monthly period for 4 years. You pay 7% interest, compounded monthly.(a) What is the amount of each payment? (b) Find the total amount of interest you will pay.
Suppose that you borrow $20,000 for four years at 8% toward the purchase of a car. Find the monthly payment and the total interest for the loan.
In order to buy a car, you borrow $30,000 from a friend at 8%/year compounded monthly for 4 years. You plan to repay the loan with 48 equal monthly payments.Part a)How much are the monthly payments? $______ per month.
Assume that you have purchased a new car and after your down payment, you borrowed $10,000 from a bank to pay for the car. Also assume that you have agreed to pay off this loan by making equal monthly payments for 4 years. Given that the annual interest rate is 11%, how much will be the payment each month? How much will be the payment if you want to pay all the rest of the loan at once at the beginning of third year?
Suppose you borrow $10,000 from your parents to buy a car. You agree to pay $208 per month for 48 months. What is the monthly interest rate? Respuesta:
Suppose you purchase a car for a total price of $25,445, including taxes and license fee, and finance that amount for 4 years at an annual interest rate of 8%. Please provide step by step to find the monthly payment and what is the total amount of interest paid over the term of the loan? Thanks
Suppose that you deposit $7000 in a savings account that pays 4% annual interest, with interest credited to the account at the end of each year. Assuming that no withdrawals are made, complete the following: a. Find the balance in the account after 5 years. b. Find the balance of the account after 9 years and 10 months.
A person wants to borrow as much money as possible today with an annual payment of $1000 at the end of each year for 5 years. If he is charged 7% interest compounded annually, how much could he borrow? Select one: a. $9130.25 b. $6130.25 C. $4130.25 d. $8130.25 The future value of annual deposited started from the end of period one up to year 7, is: Select one: a. A(F/A,i,7) b. A(F/A,i,6) C. P(F/A,I,7) d. P(F/A,i,6)