3. Calculate the amount of interest earned on $10,250 invested for 5 years at 8% compounded semi-annually. 4. (a) How many years will it take to have $5,800 if you invest $1,500 at 5% compounded monthly? (b) What effective annual interest rate would this be equivalent to?

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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.