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 NumberAmount PaidInterest PaidPrincipal RepaidOutstanding Principal Balance%24%24$42$.$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.)

A loan is a financial arrangement between two parties in which one party borrows funds at a…

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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Concept explainers

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.

Question

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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