Loan Repayment A loan of $10,000 is to beamortized with quarterly payments over 4 years. Ifthe interest on the loan is 8% per year, paid on theunpaid balance,a. What is the interest rate charged each quarter onthe unpaid balance? b. How many payments are made to repay the loan?c. What payment is required quarterly to amortizethe loan?

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Chapter7: Using Consumer Loans
Section: Chapter Questions
Problem 4FPE: Calculating single-payment loan amount due at maturity. Stanley Price plans to borrow 8,000 for five...
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Loan Repayment A loan of $10,000 is to be
amortized with quarterly payments over 4 years. If
the interest on the loan is 8% per year, paid on the
unpaid balance,
a. What is the interest rate charged each quarter on
the unpaid balance?

b. How many payments are made to repay the loan?
c. What payment is required quarterly to amortize
the loan?

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