Question

The local loan shark has loaned you $1,000. The interest rate you must pay is 18%, compounded monthly. The loan will be repaid by making 24-equal monthly payment. What is the amount of each monthly payment?

Answer #1

Ellen borrowed $25,000 from a loan shark at the APR of 35%,
compounded monthly. The entire amount, principal plus interest, is
to be repaid at the end of five years. This loan shark is not a
nice person and Ellen is a little nervous, so she starts a savings
account in her local bank. The bank pays interest at the APR of 8%,
compounded quarterly. Ellen will make 20 equal quarterly deposits
into her account, then, right after the last...

Your local loan shark offers weekly payday loans: You can borrow
$1,000 and pay back $1,040 one week later (or lose a finger or
two).
1. What is the effective annual rate on the loan? Enter your
answer as a decimal and not a percentage.
2. What is the APR on the loan? Enter your answer as a decimal
and not a percentage.

A local finance company quotes a 20% interest rate on a one year
loan. If you borrow $10,000, the interest for the year will be
$2,000. Because you will pay a total of $12,000, the finance
company requires that you pay $1,000 per month over the next 12
months with the first payment in one month. Is this a 20% loan?
Find the effective annual interest rate on this loan.Find the
annual interest rate compounded monthly.

A bank will loan you $8,500 for four years to buy a car. The
loan must be repaid in 48 equal monthly payments. The annual
interest rate on the loan is 16% of the unpaid balance. What is the
amount of the monthly payments?

You needed $10,000 and obtained the following loan:
Loan specifics: You are expected to pay 24 equal monthly
installments ($A per month) at APR 12%, compounded monthly,
starting from a month from obtaining the loan. If you miss a
payment, your APR goes up to 24%, duration of the loan does not
change but your monthly fixed payments go up.
You miss your 12th payment. On the day of your 13th payment, the
bank offers you a new deal. If...

you take a one year installment loan of $1000 at an interest
rate of 12% per year (1% per month) to be repaid in 12 equal
monthly payments.
a. what is the monthly payment
b. what is the total amount of interest paid over tge 12 month
term of the loan?

2. Suppose you borrow $20,000 at an 18 percent simple interest
but must repay your loan in 12 equal monthly payments.
a. Find the APR for this loan.
b. What is the corresponding EAR?
3. Suppose you deposit $20,000 in a savings account. After 210
days, you withdraw your funds. If the bank paid you $340 in
interest for the 210-day period, what is your APY?
4. Suppose that the house of your dreams costs $1,200,000. You
manage to scrap...

Consider an amortizing loan. The amount borrowed initially is
$21618, the interest rate is 5% APR, and the loan is to be repaid
in equal monthly payments over 17 years. As we know, while each
monthly payment will be the same, the amounts of interest and
principle paid will change from payment to payment. How much of the
very first payment is interest?

2. Suppose you borrow $20,000 at an 18 percent simple interest
but must repay your loan in 12 equal monthly payments.
a. Find the APR for this loan.
b. What is the corresponding EAR?

Two loans, both of an amount of 720,000 are repaid at a nominal
interest
rate of 19.2% convertible monthly. Loan 1 is to be repaid with 360
level monthly
payments. Loan 2 is to be repaid by 360 monthly payments, each
containing
equal principal amounts and an interest amount based on the unpaid
balance.
Payments are made at the end of each month for both loans. The
monthly
payment for Loan 1 first exceeds the monthly payment for Loan 2...

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