A loan of $16,000 with interest at 10% compounded semi-annually is repaid in 9 years by equal payments made at the end of each 1 month. (a) What is the size of the periodic payment? (b) Construct an amortization schedule showing the details of the last three payments. (c) What is the total paid and the total interest?
A loan of $16,000 with interest at 10% compounded semi-annually is repaid in 9 years by equal payments made at the end of each 1 month. (a) What is the size of the periodic payment? (b) Construct an amortization schedule showing the details of the last three payments. (c) What is the total paid and the total interest?
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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Transcribed Image Text:This Test: 15 pts pos:
A loan of $16,000 with interest at 10% compounded semi-annually is repaid in 9 years by equal payments made at the end of each 1 month.
(a) What is the size of the periodic payment?
(b) Construct an amortization schedule showing the details of the last three payments.
(c) What is the total paid and the total interest?
(a) The size of the periodic payment is $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
(b) Complete the table below for the last three payments in the schedule, starting with the third-to-last payment. (Round to the nearest cent as needed.)
Payment Number
Amount Paid
Interest Paid
Principal Repaid
Outstanding Principal Balance
%24
%24
$4
2$.
$4
$0
(c) Total Paid = $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Interest Paid = $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
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