Answered: Julie Miller is borrowing $10,000 at a…

Julie Miller is borrowing $10,000 at a compound annual interest rate of 12%. Amortize the loan if semi-annual payment are made for 5 years. Prepare a loan amortization schedule.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 41P

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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

Julie Miller is borrowing $10,000 at a compound annual interest rate of 12%. Amortize the loan if semi-annual payment are made for 5 years.

Prepare a loan amortization schedule.( PVIFA is 3.465 )

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