ordan received a loan of $1,300 at 4.50% compounded quarterly. She had to make payments at the end of every quarter for 1 year to settle the loan. a. Calculate the size of the quarterly payments. Round to the nearest cent

ordan received a loan of $1,300 at 4.50% compounded quarterly. She had to make payments at the end of every quarter for 1 year to settle the loan. a. Calculate the size of the quarterly payments. Round to the nearest cent

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

0-4 payment numbers then the total

ordan received a loan of $1,300 at 4.50% compounded quarterly. She had to make
payments at the end of every quarter for 1 year to settle the loan.
a. Calculate the size of the quarterly payments.
Round to the nearest cent

Payment
Amount Paid
Interest Portion
Principal
Principal
Balance
Number
Portion
$1,300.00

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