The interest rate on a $14,200 loan is 8.6% compounded semiannually. Semiannual payments will pay off the loan in nine years. (Do not round intermediate calculations. Round the PMT and final answers to 2 decimal places.) a. Calculate the interest component of Payment 12. Interest %24 b. Calculate the principal component of Payment 5. Principal 2$ c. Calculate the interest paid in Year 8. Interest paid %24 d. How much do Payments 5 to 8 inclusive reduce the principal balance? Principal reduction

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The interest rate on a $14,200 loan is 8.6% compounded semiannually. Semiannual payments will pay off the loan in nine years. (Do
not round intermediate calculations. Round the PMT and final answers to 2 decimal places.)
a. Calculate the interest component of Payment 12.
Interest
%24
b. Calculate the principal component of Payment 5.
Principal
c. Calculate the interest paid in Year 8.
Interest paid
%24
d. How much do Payments 5 to 8 inclusive reduce the principal balance?
Principal reduction
Transcribed Image Text:The interest rate on a $14,200 loan is 8.6% compounded semiannually. Semiannual payments will pay off the loan in nine years. (Do not round intermediate calculations. Round the PMT and final answers to 2 decimal places.) a. Calculate the interest component of Payment 12. Interest %24 b. Calculate the principal component of Payment 5. Principal c. Calculate the interest paid in Year 8. Interest paid %24 d. How much do Payments 5 to 8 inclusive reduce the principal balance? Principal reduction
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