Locust Inc. owes $17,000.00 to be repaid by monthly payments of $490.00. Interest is 4% compounded monthly. (a) How many payments will Locust Inc. have to make? (b) How much interest is included in the 14th payment? (c) How much of the principal will be repaid in the 7th payment period?
Locust Inc. owes $17,000.00 to be repaid by monthly payments of $490.00. Interest is 4% compounded monthly. (a) How many payments will Locust Inc. have to make? (b) How much interest is included in the 14th payment? (c) How much of the principal will be repaid in the 7th payment period?
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
Locust Inc. owes
$17,000.00
to be repaid by monthly payments of
$490.00.
Interest is
4%
compounded monthly.
|
(a) |
How many payments will Locust Inc. have to make? |
|
(b) |
How much interest is included in the
14th payment? |
|
(c) |
How much of the principal will be repaid in the
7th payment period? |
|
(d) |
Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 6 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education