You have a new 10 year Student loan for $18,500.00 that charges an interest rate of 8.55% compounded monthly. The Amortization Table below shows your activity for the first month's payment. Fill in The Interest Payment, Principle Payment, and New Balance after you make the second Payment in Month 2 Payment Payment Interest Payment Principle Payment New Balance amount $18,500.00 $229.87 $131.81 $98.06 $18,401.94 5229.87
You have a new 10 year Student loan for $18,500.00 that charges an interest rate of 8.55% compounded monthly. The Amortization Table below shows your activity for the first month's payment. Fill in The Interest Payment, Principle Payment, and New Balance after you make the second Payment in Month 2 Payment Payment Interest Payment Principle Payment New Balance amount $18,500.00 $229.87 $131.81 $98.06 $18,401.94 5229.87
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
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Question
8
Transcribed Image Text:You have a new 10 year Student loan for $18,500.00 that charges an interest rate of 8.55% compounded
monthly. The Amortization Table below shows your activity for the first month's payment.
Fill in The Interest Payment, Principle Payment, and New Balance after you make the second Payment in
Month 2
Payment
%3:
Payment
Interest Payment
Principle Payment
New Balance
amount
$18,500.00
$229.87
$131.81
$98.06
$18,401.94
$229.87
Expert Solution
Step 1
Loan: The loan is a value that is borrowed from external sources like banks and this amount is repaid later in fixed installments which includes part of principal and interest. This is known as loan amortization. It is the liability that is used to finance the requirement of the funds.
A type of loan in which the borrower has to make a schedule for the periodic payment regarding both principal and interest amount is term as the amortized loan.
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