A debt of $42 500.00 is repaid by payments of $4850.00 made at 3) the end of each year. Interest is 7% compounded semi-annually. a) How many payments are needed to repay the debt? 3) b) What is the cost of the debt for the first three years? c) What is the principal repaid in the 3rd year?

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
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3)
the end of each year. Interest is 7% compounded semi-annually.
A debt of $42 500.00 is repaid by payments of $4850.00 made at
3)
a) How many payments are needed to repay the debt?
b) What is the cost of the debt for the first three years?
c) What is the principal repaid in the 3rd year?
Transcribed Image Text:3) the end of each year. Interest is 7% compounded semi-annually. A debt of $42 500.00 is repaid by payments of $4850.00 made at 3) a) How many payments are needed to repay the debt? b) What is the cost of the debt for the first three years? c) What is the principal repaid in the 3rd year?
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