A debt of $31,000 is repaid over 8 years with payments occurring semi-annually. Interest 4% compounded quarterly. (a) What is the size of the periodic payment? (b) What is the outstanding principal after payment 7? (c) What is the interest paid on payment 8? (d) How much principal is repaid in payment 8?
A debt of $31,000 is repaid over 8 years with payments occurring semi-annually. Interest 4% compounded quarterly. (a) What is the size of the periodic payment? (b) What is the outstanding principal after payment 7? (c) What is the interest paid on payment 8? (d) How much principal is repaid in payment 8?
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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Transcribed Image Text:A debt of $31,000 is repaid over 8 years with payments occurring semi-annually. Interest is 4% compounded quarterly.
(a) What is the size of the periodic payment?
(b) What is the outstanding principal after payment 7?
(c) What is the interest paid on payment 8?
(d) How much principal is repaid in payment 8?
(a) The size of the periodic payment is $
(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
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