Consider a debt that must be repaid over a nine-year period in progressively larger half-yearly installments. As a result, at the end of the first half-year's installment is fixed at £1770, and subsequent payments increase by £50 per half-year. Assuming that the interest rate will be 4.9% per year, convertible every six months, over the duration of the contract, calculate the initial amount of loan that was borrowed, the total amount of loan repaid up until the start of the 3th year and the amount of interest component in the 7th instalment, (No tables, ONLY formulas, please)

Consider a debt that must be repaid over a nine-year period in progressively larger half-yearly installments. As a result, at the end of the first half-year's installment is fixed at £1770, and subsequent payments increase by £50 per half-year. Assuming that the interest rate will be 4.9% per year, convertible every six months, over the duration of the contract, calculate the initial amount of loan that was borrowed, the total amount of loan repaid up until the start of the 3th year and the amount of interest component in the 7th instalment, (No tables, ONLY formulas, please)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 41P

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