After retirement, Andy plans to buy bonds in a perpetual fund. What amount must Andy place in a perpetual fund today, if it earns 4.8% compounded semi-annually and the first monthly payment of $500 in perpetuity will be made one year from today? $126 244 $120 396 $119 629 $125 do $120 873

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A: Here,

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A:

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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.