a. Calculate the interest component of Payment 13. Interest b. Calculate the principal component of Payment 50. Principal c. Calculate the total interest in Payments 39 to 50 inclusive. Total interest %24 %24

a. Calculate the interest component of Payment 13. Interest b. Calculate the principal component of Payment 50. Principal c. Calculate the total interest in Payments 39 to 50 inclusive. Total interest %24 %24

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Question

The interest rate on a $57,000 loan is 10.4%
compounded semiannually. Quarterly payments
will pay off the loan in fifteen years. (Do not round
intermediate calculations and round your final
answers to 2 decimal places.)
a. Calculate the interest component of Payment 13.
Interest
b. Calculate the principal component of Payment
50.
Principal
c. Calculate the total interest in Payments 39 to 50
inclusive.
Total interest
$
d. Calculate the reduction of principal in Year 4.
Principal reduction
%24
%24

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