Answered: 31- The amount of R$50,000.00 was…

31- The amount of R$50,000.00 was financed in 12 equal monthly installments in advance. If the creditor charges interest of 8% p.m., calculate the value of the installments.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 8E: Cash Flow Amounts R. Lee Rouse borrows 10,000 that is to be repaid in 24 equal monthly installments...

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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

31- The amount of R$50,000.00 was financed in 12 equal monthly installments in advance. If the creditor charges interest of 8% p.m., calculate the value of the installments.

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