A loan, amortized over 20 years, is repaidby making payments of $1,700 at the endof every month. If the interest rate is 5.70%compounded quarterly, what was the loanprincipal?Round your answer to the nearest cent

Information Provided: Years = 20 Monthly payment = $1700 Interest rate = 5.70% compounded quarterly…

Answered: compounded quarterly, what was the loan…

Business

Finance

compounded quarterly, what was the loan principal?

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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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.

Question

A loan, amortized over 20 years, is repaid
by making payments of $1,700 at the end
of every month. If the interest rate is 5.70%
compounded quarterly, what was the loan
principal?
Round your answer to the nearest cent

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