Question

You raise some money today from your friend. He agrees to loan
you the money you need, if you make payments of $40 a month for the
next one year. In keeping with his reputation, he requires that the
first payment be paid today. He also charges you 2 percent interest
per month. How much money are you borrowing?

ADue PV =

Answer #1

Step 1: | Immediate peyment = $40 | |||||

Step 2: | Present value of remaining payment | |||||

Present Value Of An Annuity | ||||||

= C*[1-(1+i)^-n]/i] | ||||||

Where, | ||||||

C= Cash Flow per period | ||||||

i = interest rate per period | ||||||

n=number of period | ||||||

= $40[ 1-(1+0.02)^-11 /0.02] | ||||||

= $40[ 1-(1.02)^-11 /0.02] | ||||||

= $40[ (0.1957) ] /0.02 | ||||||

= $391.47 | ||||||

Step 3: | Amount of loan = $40+391.47 | |||||

=$431.47 |

You need some money today and the only friend you have that has
any is your miserly friend. He agrees to loan you the money you
need, if you make payments of $15 a month for the next nine months.
In keeping with his reputation, he requires that the first payment
be paid today. He also charges you 2% interest per month. How much
money are you borrowing?
$135.00
$122.43
$126.49
$124.88
$120.67
??

Your friend will loan you the money you need today if you agree
to make payments of $110 a month for the next 18 months. The friend
requires that the first payment be made today (i.e. immediately
after the loan amount is disbursed). The friend charges you
interest at 21.00% compounded semi-annually. How much money are you
borrowing today?
Question 3 options:
$1,725
$1,768
$1,811
$1,854
$1,898

6. You loan some money to a friend and he agrees to pay
you $200 at the end of each month for the next 2.5 years. Using a
rate of 6.3%/year, calculate what this stream of anticipated
payments from your friend is worth in today’s dollar terms. In
other words, if your friend promises to make these payments, what
would be a fair amount to loan to him today?

A friend wants to borrow money from you. He states that he will
pay you $3,800 every 6 months for 13 years with the first payment
exactly 6 years and six months from today. The interest rate is 6.1
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14. Loan amortization and capital recovery
Ian loaned his friend $30,000 to start a new business. He
considers this loan to be an investment, and therefore requires his
friend to pay him an interest rate of 8% on the loan. He also
expects his friend to pay back the loan over the next four years by
making annual payments at the end of each year. Ian texted and
asked that you help him calculate the annual payments that he
should...

A friend wants to borrow money from you. He states that he will
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A friend wants to borrow money from you. He states that he will
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$32,128.58
$33,021.49
$35,079.17
$31,070.77
$31,956.28

Solve using excel
You give a loan to your friend to buy equipment for his
business. The friend puts $4000 of their own money as a down
payment, you lend them $12,000. The equipment is $16,000 total. You
will charge your friend 4.0% Interest every year and will collect
monthly payments for 60 months. Inflation is 1.7% per year,
constant for 5 years.
a.) What is the NPV of the loan assuming it is paid each month
on time?
b.)...

(show your steps/Formula for the problem)
b) Your best friend agrees to loan $10,000 at a 5% interest
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in 10 years?

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today, and he makes his last regular monthly payment made in 4
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