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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

You have just been hired as a loan officer at the Eagle National Bank. Your first assignment is to calculate the amount of the periodic payment required to amortize (pay off) the following loans being considered by the bank (use Table 12-2).

Loan Payment Term of Nominal Present Value
Payment Period Loan (years) Kate (%) (Amount of Loan)
7. every 3 months 5 8 $5,500

To determine

To calculate: The amount of loan payment where payment frequency is 3 months, the time duration is 5 years, the nominal rate of return is 8% and present value amount is $5,500.

Explanation

Given Information:

Payment frequency is 3 months, the time duration is 5 years, the nominal rate of return is 8% and present value amount is $5,500.

Formula used:

The formula to compute the loan payment is,

Amortization payment=Original amount of obligationPresent value table factor

Calculation:

Consider that payment frequency is 3 months, the time duration is 5 years, the nominal rate of return is 8% and present value amount is $5,500.

The rate period is 2%(8%÷4 period per year).

The number of periods is 20(5 years×4 period per year)

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Chapter 12 Solutions

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Sect-12.I P-8RESect-12.I P-9RESect-12.I P-10RESect-12.I P-11RESect-12.I P-12RESect-12.I P-13RESect-12.I P-14RESect-12.I P-15RESect-12.I P-16RESect-12.I P-17RESect-12.I P-18RESect-12.I P-19RESect-12.I P-20RESect-12.I P-21RESect-12.I P-22RESect-12.I P-23RESect-12.I P-24RESect-12.II P-4TIESect-12.II P-5TIESect-12.II P-6TIESect-12.II P-1RESect-12.II P-2RESect-12.II P-3RESect-12.II P-4RESect-12.II P-5RESect-12.II P-6RESect-12.II P-7RESect-12.II P-8RESect-12.II P-9RESect-12.II P-10RESect-12.II P-11RESect-12.II P-12RESect-12.II P-13RESect-12.II P-14RESect-12.II P-15RESect-12.II P-16RESect-12.II P-17RESect-12.II P-18RESect-12.II P-19RESect-12.II P-20RESect-12.II P-21RESect-12.II P-22RESect-12.II P-23RESect-12.II P-24RESect-12.III P-7TIESect-12.III P-8TIESect-12.III P-9TIESect-12.III P-10TIESect-12.III P-1RESect-12.III P-2RESect-12.III P-3RESect-12.III P-4RESect-12.III P-5RESect-12.III P-6RESect-12.III P-7RESect-12.III P-8RESect-12.III P-9RESect-12.III P-10RESect-12.III P-11RESect-12.III P-12RESect-12.III P-13RESect-12.III P-14RESect-12.III P-15RESect-12.III P-16RESect-12.III P-17RESect-12.III P-18RESect-12.III P-19RESect-12.III P-20RESect-12.III P-21RESect-12.III P-22RESect-12.III P-23RESect-12.III P-24RESect-12.III P-25RECh-12 P-1CRCh-12 P-2CRCh-12 P-3CRCh-12 P-4CRCh-12 P-5CRCh-12 P-6CRCh-12 P-7CRCh-12 P-8CRCh-12 P-9CRCh-12 P-10CRCh-12 P-11CRCh-12 P-12CRCh-12 P-13CRCh-12 P-14CRCh-12 P-1ATCh-12 P-2ATCh-12 P-3ATCh-12 P-4ATCh-12 P-5ATCh-12 P-6ATCh-12 P-7ATCh-12 P-8ATCh-12 P-9ATCh-12 P-10ATCh-12 P-11ATCh-12 P-12ATCh-12 P-13ATCh-12 P-14ATCh-12 P-15ATCh-12 P-16ATCh-12 P-17ATCh-12 P-18ATCh-12 P-19ATCh-12 P-20ATCh-12 P-21ATCh-12 P-22ATCh-12 P-23ATCh-12 P-24ATCh-12 P-25ATCh-12 P-26ATCh-12 P-27ATCh-12 P-28ATCh-12 P-29ATCh-12 P-30ATCh-12 P-31ATCh-12 P-32ATCh-12 P-33ATCh-12 P-34ATCh-12 P-35AT

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