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
Related questions
Question
complete part (D
Transcribed Image Text:Locust Inc. owes $13,000.00 to be repaid by monthly payments of $490.00. Interest is 8% compounded monthly.
(a) How many payments will Locust Inc. have to make?
(b) How much interest is included in the 15th payment?
(c) How much of the principal will be repaid in the 13th payment period?
(d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and
totals.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
(c) The principal is $ 436.81.
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.).
(d) Complete the table below for the first three payments in the schedule.
(Do not round until the final answer. Then round to the nearest cent as needed.)
Payment Number
Amount Paid
Interest Paid
0
1
$490.00
$ 86.67
$ 403.33
$490.00
$ 84.64
$ 405.36
3
$490.00
$82.58
$ 407.24
Complete the table for the last three payments, starting with the third-to-last payment.
(Do not round until the final answer. Then round to the nearest cent as needed.)
Amount Paid
Interest Paid
Payment Number
2
28
$490.00
Principal Repaid Outstanding Principal
Balance
$13,000.00
$ 12596.67
$ 12191.31
$11783.89
4.24
Principal Repaid
$483.76
Outstanding
Principal Balance
$272.88
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