5. (п) Write down a formula for the outstanding principal P, after k payments, of a debt A lwing nmortized by equal payments R over n equal periods with an interest rate i per conversion period. A debt of E8000 with interest at 12% compounded semi- (b) annually is to be amortizel by equal semiannal payments R over the next four ycars. Find (i) R. the payment rounded up to the nearest curo, and (ii) the concluding payment X (assuming equal payments of Ra are made for all but the final payment). A EGO00 loan is to be repnid at the end of 2.5 years. Interest (c) charged is 10% compounded quarterly. The debtor establishes a sinking fund thuat carns 8% interest compounded quarterly. Find cach of the following: (i) The interest payment on the debt for cach 3 month interval. (ii) The amount in the sinking fund at the end of the fifth period. (iii) The sinking fund interest income for the sixth payment pe- riod. (iv) The total cost to the debtor at the end of every 3 months.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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5.
Write down a forınula for the outstanding principal P, after
(n)
k payments, of a debt A leing nmortizerl by equal payments R
over n equal periods with an interest rate i per eonversion period.
A debt of E8000 with interest at 12% compounded semi-
(b)
annually is to be amortizel by equal semiannual payınents R over
the next four ycars. Find (i) Ro. the payment rounded up to the
nearest euro, anel (ii) the conchuding payıment X (assuming equal
payınents of Rq are made for all but the final payment).
(c)
charged is 10% compounded quarterly. The debtor establishes a
sinking fund that carns 8% interest compounded quarterly. Find
cach of the following:
A €6000 loan is to be repnid at the end of 2.5 years. Interest
(i) The interest payment on the debt for cach 3 month interval.
(ii) The amount in the sinking fund at the end of the fifth period.
(iii) The sinking fund interest income for the sixth payment pe-
riod.
(iv) The total cost to the debtor at the end of every 3 months.
Transcribed Image Text:5. Write down a forınula for the outstanding principal P, after (n) k payments, of a debt A leing nmortizerl by equal payments R over n equal periods with an interest rate i per eonversion period. A debt of E8000 with interest at 12% compounded semi- (b) annually is to be amortizel by equal semiannual payınents R over the next four ycars. Find (i) Ro. the payment rounded up to the nearest euro, anel (ii) the conchuding payıment X (assuming equal payınents of Rq are made for all but the final payment). (c) charged is 10% compounded quarterly. The debtor establishes a sinking fund that carns 8% interest compounded quarterly. Find cach of the following: A €6000 loan is to be repnid at the end of 2.5 years. Interest (i) The interest payment on the debt for cach 3 month interval. (ii) The amount in the sinking fund at the end of the fifth period. (iii) The sinking fund interest income for the sixth payment pe- riod. (iv) The total cost to the debtor at the end of every 3 months.
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