A debt of ​$40,000 is repaid over 12 years with payments occurring annually. Interest is 4% compounded quarterly.   ​(a) What is the size of the periodic​ payment?   ​(b) What is the outstanding principal after payment 6​?   ​(c) What is the interest paid on payment 7​?   ​(d) How much principal is repaid in payment 7​?

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
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A debt of ​$40,000 is repaid over 12 years with payments occurring annually. Interest is 4% compounded quarterly.
 
​(a) What is the size of the periodic​ payment?
 
​(b) What is the outstanding principal after payment 6​?
 
​(c) What is the interest paid on payment 7​?
 
​(d) How much principal is repaid in payment 7​?
 
 

 

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