How do banks calculate the monthly payment on a loan?

Q: In some banks the interest on the deposit depends on the amount on the account. Derive the…

A: Given in this question, Savings account balance grows, at each instant of time, at a proportional…

Q: Finding the total interest of a loan is similar to finding the total interest in an annuity's

A: When you take a loan then you have to make payments towards the principal amount as well as towards…

Q: What is the formula for calculating interest on a note receivable?

A: Introduction:- A note receivable is a written promissory note to receive a specified amount of cash…

Q: What Percentage of down- payment do you have to give to the bank when buying a mortgage

A: Down Payment : It is the Initial lump sum amount which the borrower pay before sanction of loan.…

Q: What is the amount of the required annual deposit?

A: Here we have been give the following information              Funds required at the end of January…

Q: 1. What is the market rate of interest at which the lender can loan proceeds if the borrower prepaid…

A: Market interest rate is the rate which is prevailing in the market at present.

Q: A lending institution charges interest at the rate of 3.5% per quarter, a. What is the nominal…

A: Interest rate per quarter = 3.5%   a. What is the nominal interest rate?       Nominal interest rate…

Q: What is a bank discount? How does it differ to simple interest? State the bank discount formula

A: Bank DiscountIt is the Interest amount on the loan that is being subtracted from the principal value…

Q: With regard to mortgages, how is the monthly payment including principal and interest categorized as…

A: An annuity refers to the annual payment of a debt which includes a portion of principal as well as…

Q: What would these securities be called and what does the Bank need to do to ensure the loan monies…

A: Loans refer to the agreement between the borrower and the bank or financial institution for…

Q: deposited in a bank that pays 6% interest, how large must your annual deposit be?

A: Information Provided: Present value = $3000 Future value = $15,000 Term = 10 years Interest rate =…

Q: How did you get the loan repayment and bank loan?

A: Bank Loan is a non-current liability of the business and it is borrowed to finance long term plans…

Q: How long-term deposit accounts benefit borrowers

A: A deposit account is an account that is held by the customers of a bank and financial institutions…

Q: (Remember to find the total amount paid over the life of the loan and subtract from house cost) What…

A: Loan Amortization: It is the process of paying the loan amount by making periodic payments by the…

Q: How the interest rate affects the release of credit card

A: Given,

Q: The actual amount that is given to the borrower is called the after the loan has been discounted.

A: Basically a discounted loan has three components Discount Proceeds Maturity Value

Q: Can borrowers pay off part, or all, of loans any time that they desire?

A: No, borrowers can not make payment in part, or full loan amount at whatever time they desire to pay.…

Q: What would the loan payment amount and the interest payed for Kevan’s loan be if the PV=8500,…

A: The term loan payment amount refers to the total amount paid by an individual to pay off the loan…

Q: When would there be a discount on a loan? How about a premium?

A: The loan is purchased to finance the purchase of equipment, education purposes, the purchase of…

Q: A bank pays 5% with daily compounding on its savings accounts. Should it advertisethe nominal or…

A: An interest rate is usually in two forms namely nominal interest rate and effective interest rate.…

Q: Interview someone who borrowed from the bank, know how much is the rate pplied to the loan, term of…

A: A loan is made if, in return for the payment of both the principal and interest, you obtain cash or…

Q: In order to earn 14% simple interest on a 90 day short term loan – what discount rate should be…

A: Formula to be Used:- Simple Interest = Principle ×Rate × timeperiod100 Amount = Principle +SI Future…

Q: a. What was the payment size? Round to the nearest cent b. What was the size of the interest portion…

A: Amortization: It represents the process of paying the loan by making periodic payments. These…

Q: charged by banks (this is the The interest rate on loans is often linked to the banks lowest lending…

A: Interest rate is the rate or charge of borrowing money.

Q: Can we calculate the total annual interest payment for a credit card by using the future value…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: How can we calculate the total annual interest payment for a credit card debt of $ 1,000?

A: We should pay the credit card bill by the end of credit free period to avoid interest charges upon…

Q: (a) What is the rebate fraction of a 36 month loan paid off after the 13th payment?   (b) What is…

A: Total loan period = 36 months Months completed =13 months Remainig months = total loan period -…

Q: What are the Effects of Maturity on Monthly Payments on Fully Amortizing Loans?

A: In fully amortized loan, total loan will be paid off by end of maturity i.e. loan term. Monthly…

Q: Calculate rebate on bills discounted?

A: When a customer who has bills recievable is facing liquidity issue he can approach bank inroder to…

Q: What are the 5 Cs of credit that are sometimes used by bankers and others to determine whether a…

A: While granting credit banks do analysis of that loan amount will be repaid without any problem.

Q: a. How many payments are required to settle the loan? payments Round up to the next payment b. What…

A: Loan: It represents a sum of the amount borrowed by the borrower from the lender. The borrower pays…

Q: payments. What is her effective rate of interest?

A:

Q: ents plus the interest on the remaining loan. What was the amount of the loan? What was the amount…

A: in this problem payment is made by four equal payment plus interest on remaining amount.

Q: What is the total payback amount of the loan? What is the amount of each payment? /month What is the…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Simple interest refers to interest on a loan computed as a percentage of the loan amount. Compound…

A: COMPOUND INTEREST IS CALCULATED ON THE PRINCIPAL AMOUNT AND ALSO ON THE ACCUMULATED INTEREST OF…

Q: What is the interest rate the borrower will pay after the first rate adjustment?

A: Data given: Start rate = 3.50% Maximum cap for the first year=3% MTA index at the end of the first…

Q: (a)What is the rebate fraction of a 36 month loan paid off after the 12th payment?   (b) What is the…

A: Formula used Rebate Fraction = Sum of remaining periods/Sum of total periods

Q: What is the effective rate of interest if a bank specified a nominal rate of 20% compounded…

A: In effective rate of interest the compounding are taken into consideration.

Q: How do interest expense and the carrying value of the note change over time for an installment note…

A: Notes payable are issued on amount borrowed which needs to be paid off in equal installments…

Q: what is the relationship between tne intrest rate and the bank prime loan rate

A: The prime rate (prime) and interest rate are both set by the Federal Reserve Bank (the Fed). In…

Q: What is the true rate of the cost of credit on a YEARLY basis? interest rate (your response)…

A: Cost of credit is the additional amount over the amount borrowed. It should be repaid by the…

Q: three-year bank loan to be repaid at maturity is an example of:

A: Non current laibilties  A three years bank loan to be repaid at MATURITY is an example of non…

Calculating the Return On A Loan