2/ a person owes 1000$ due in 1 year with interest rate 6%. two equal payments in 3 and 9 months, respectively, will be used to discharge this obligation. What will the size of these payments if the person and the creditor agree to use an interest rate of 6% and a focal date in 1 year.

2/ a person owes 1000$ due in 1 year with interest rate 6%. two equal payments in 3 and 9 months, respectively, will be used to discharge this obligation. What will the size of these payments if the person and the creditor agree to use an interest rate of 6% and a focal date in 1 year.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 19PROB

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Concept explainers

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.

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2/ a person owes 1000$ due in 1 year with interest rate 6%. two equal
payments in 3 and 9 months, respectively, will be used to discharge this
obligation. What will the size of these payments if the person and the creditor
agree to use an interest rate of 6% and a focal date in 1 year,

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