Q2/ A person has a bank loan of $10,000 to pay for his new car. The loan is to berepaid in equal monthly payment for 5 years with nominal interest rate of 12%compounded monthly. What is the amount of each monthly payment?Q3/ Answer the followings (provide calculations)1. The value of A for 8 years, equivalent to P=10 000 units, if i=10% compoundedquarterly is2. It takes --------- years for money to increase to five times the initial amount at aninterest year of 18%.3. The future value of an annual payments of 300 units for 6 years at an interest rate of6%. ^a) 43.01b) 61.06c)1475d) 2092.624. The present value of annual payments of 300 units for 6 years at an interest rate of6%.a) 43.01b) 61.06c)1475d) 2092.625. The quarterly effective interest rate of a 15% per year compounded monthly is (pts)a) 4.019%b) 3.979%c) 3.75%d) 3.656%

note:- According to bartleby guidelines , if multiple questions are asked , then 1st question needs…

Q2/ A person has a bank loan of $10,000 to pay for his new car. The loan is to be repaid in equal monthly payment for 5 years with nominal interest rate of 12% compounded monthly. What is the amount of each monthly payment?

Q2/ A person has a bank loan of $10,000 to pay for his new car. The loan is to be repaid in equal monthly payment for 5 years with nominal interest rate of 12% compounded monthly. What is the amount of each monthly payment?

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 2STP

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Concept explainers

Amortized Loans

The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.

Question

Q2/ A person has a bank loan of $10,000 to pay for his new car. The loan is to be
repaid in equal monthly payment for 5 years with nominal interest rate of 12%
compounded monthly. What is the amount of each monthly payment?
Q3/ Answer the followings (provide calculations)
1. The value of A for 8 years, equivalent to P=10 000 units, if i=10% compounded
quarterly is
2. It takes --------- years for money to increase to five times the initial amount at an
interest year of 18%.
3. The future value of an annual payments of 300 units for 6 years at an interest rate of
6%. ^
a) 43.01
b) 61.06
c)1475
d) 2092.62
4. The present value of annual payments of 300 units for 6 years at an interest rate of
6%.
a) 43.01
b) 61.06
c)1475
d) 2092.62
5. The quarterly effective interest rate of a 15% per year compounded monthly is (
pts)
a) 4.019%
b) 3.979%
c) 3.75%
d) 3.656%

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