A loan of $10500 is to be repaid by 10 annual payments beginning 6 months from the date of the loan. The first payment is to be half as large as the others. For the first 4 1/2 years interest is at 0.047 effective; for the remainder of the term interest is at 0.078 effective. Find amount of the first payment.

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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.