Use the number 4 formula in the second image labeled principal contained in kth payment (NO EXCEL). Please write out all steps and explain. A loan at j4 = 8.6% is being repaid over n-quarters, with quarterly payments of $647.18. The portion of the 9thpayment that goes towards principal is $349.23. What is the value of n?33A. 29B. 38C. 39D. 37 Table 5.2 Amortization FormulasA1. Periodic payment: R = = A.anr2. Principal outstanding at beginning of kth period:1 − (1 + r)¬n+k−1Ran-k+Ir =1 − (1 + r)¯n= R.r3. Interest in kth payment: Rran-k+1}4. Principal contained in kth payment: R(1 − ran−k+1\r)5. Total interest paid: R(n − a) = nR - A

Amortization:Amortization, a financial concept of gradual debt reduction, epitomizes the systematic…

A loan at j4 = 8.6% is being repaid over n-quarters, with quarterly payments of $647.18. The portion of the 9th payment that goes towards principal is $349.23. What is the value of n? O A. 29 B. 38 O C. 39 D. 37

A loan at j4 = 8.6% is being repaid over n-quarters, with quarterly payments of $647.18. The portion of the 9th payment that goes towards principal is $349.23. What is the value of n? O A. 29 B. 38 O C. 39 D. 37

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

Problem 1PS

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Question

Use the number 4 formula in the second image labeled principal contained in kth payment (NO EXCEL). Please write out all steps and explain.

A loan at j4 = 8.6% is being repaid over n-quarters, with quarterly payments of $647.18. The portion of the 9th
payment that goes towards principal is $349.23. What is the value of n?
33
A. 29
B. 38
C. 39
D. 37

Table 5.2 Amortization Formulas
A
1. Periodic payment: R = = A.
anr
2. Principal outstanding at beginning of kth period:
1 − (1 + r)¬n+k−1
Ran-k+Ir =
1 − (1 + r)¯n
= R.
r
3. Interest in kth payment: Rran-k+1}
4. Principal contained in kth payment: R(1 − ran−k+1\r)
5. Total interest paid: R(n − a) = nR - A

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