A debt of $63 100.00 is repaid by payments of $4350.00 made at the end of every six months. Interest is 6.5% compounded quarterly. a) What is the number of payments needed to retire the debt? b) What is the cost of the debt for the first five years? c) What is the interest paid in the 11th payment?

A debt of $63 100.00 is repaid by payments of $4350.00 made at the end of every six months. Interest is 6.5% compounded quarterly. a) What is the number of payments needed to retire the debt? b) What is the cost of the debt for the first five years? c) What is the interest paid in the 11th payment?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 17P

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Question

A debt of $63 100.00 is repaid by payments of $4350.00 made at the end of every six months. Interest is 6.5% compounded quarterly.
a) What is the number of payments needed to retire the debt?
b) What is the cost of the debt for the first five years?

c) What is the interest paid in the 11th payment?
d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals.

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