Find the payment necessary to amortize a 12% loan of $1300 compounded quarterly, with 8 quarterly payments.The payment size is $(Round to the nearest cent.)

Answered: Find the payment necessary to amortize…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 25E

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Find the payment necessary to amortize a 12% loan of $1300 compounded quarterly, with 8 quarterly payments.
The payment size is $
(Round to the nearest cent.)

Expert Solution

Step 1

Amortization is the process of paying off a debt, such as a loan or mortgage, in regular installments over a set period of time. The payments typically consist of both principal and interest, and the amount of each component changes as the loan is paid down. The goal of amortization is to reduce the loan balance over time so that it eventually reaches zero.

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