Two debts, the first of $1900 due three months ago and the second of $1600 borrowed two years ago for a term of five years at 7.3% compounded annually, are to be replaced by a single payment one year from now. Determine the size of the replacement payment if interest is 6.4% compounded quarterly and the focal date is one year from now.
Two debts, the first of $1900 due three months ago and the second of $1600 borrowed two years ago for a term of five years at 7.3% compounded annually, are to be replaced by a single payment one year from now. Determine the size of the replacement payment if interest is 6.4% compounded quarterly and the focal date is one year from now.
Chapter4: Time Value Of Money
Section4.17: Amortized Loans
Problem 1ST
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A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
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The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
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Two debts, the first of $1900 due three months ago and the second of $1600 borrowed two years ago for a term of five years at 7.3% compounded annually, are to be replaced by a single payment one year from now.
Determine the size of the replacement payment if interest is 6.4% compounded quarterly and the focal date is one year from now.
The size of the replacement payment is $
(Roundtothenearest centas needed. Round all intermediate values to six decimal places as needed.)
..
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