What sum of money should be set aside at a child's birth to provide for 8 semi- annual payments of $4000 to cover expenses for a university education. The first payment is to be made on the child's 18th birthday. The interest rate is 7% compounded semi-annually. 27495.82 28821.11 8248.34 7896.09

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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.